Australian Technology News

THIS afternoon an unassuming planet 20 light years away was bombarded with a giant wad of Earth spam.

Opinions are split amongst analysts, telcos and ISPs as to whether Pipe's new PPC-1 Sydney to Guam submarine cable will lead to lower broadband prices for Australians, but all agree the threat of its arrival, set for October, has had a positive impact already.

Over the course of Pipe Network's tumultuous ride to launching PPC-1 — which has included alleged threats of violence to its chief Bevan Slattery from a tier one telco, and withdrawal of support from its financiers — broadband enthusiasts have speculated widely on what the new highway to Australia's largest content provider, the US, will mean.

Greater competition, leading to dramatic price drops and faster speeds are two that have been bandied about, but opinions are divided on how these will play out. One clear benefit to ISPs has been the response from Southern Cross Cable Network — 50 per cent owned by Telecom NZ, 40 per cent by SingTel-Optus and 10 per cent by Verizon Business — which dropped its prices by 50 per cent in the past 18 months, and is on the move to significantly boost capacity.

According to one industry source, Southern Cross has a lot of room to move, but has only done so in response to the impending threat of PPC-1. Southern Cross has utilised a small percentage of its capacity, said the source, but only faces incremental costs in expanding that. In other words, it can boost its capacity without it equating to lower returns.

How that plays out for consumers though is another matter. iiNet's managing director Michael Malone told ZDNet.com.au, "No [ISP] will do lower charges. You just increase quotas and pass the benefit through to customers", which iiNet had done one month ago. In other words, when PPC-1 becomes operational in October, don't expect lower charges — they've already been passed on.

Primus managing director, Ravi Bahtia, also reckons Pipe's launch won't lead to lower future prices. "We've already done that. Our $49 plan includes 80 gigs [GB]."

A bigger factor influencing the cost of broadband in Australia, according to Bahtia, is wholesale access to Telstra's Unbundled Local Loop Service (ULLS), which allows an ISP to deliver broadband without the traditional landline connection. Bahtia is strongly opposed to the Australian Competition and Consumer Commission's plan to increase the ULLS pricing payable to Telstra by 40 per cent over the next three years.

"We have an excellent deal given the distance of Australia," Bahtia said, but the difference between the US and Australia is that "[US ISPs] don't pay the exorbitant access charges which we do in Australia, which the ACCC, in all its wisdom, decided to increase."

As for the impact Pipe will have on Primus' costs, Bahtia said: "The international component cost is very little. If you look at the most popular plans, the international carriage costs around 10 per cent." Other costs that he's more concerned about were backhaul, network equipment and power.

M2 Telecommunications chief executive Vaughan Bowen, which buys its international capacity from Telstra, Optus and Tata Communications, disagreed with Bahtia: "It certainly creates a more competitive market for international bandwidth, which is the highest component of our bandwidth consumption. There's been some very significant price improvements in bandwidth cost and this Pipe link pending has helped negotiate because everyone knows it's on the horizon," he said.

Internode's carrier relations manager has previously said that customers won't notice any performance difference once PPC-1 has launched, but that consumers can expect cheaper broadband.

Ovum telecommunications analyst, David Kennedy, has taken a longer term view of the impact that Pipe will have in terms of demand for content expected once the National Broadband Network (NBN) is launched.

"The government's NBN project will increase demand for international capacity significantly, though it's still difficult to quantify this," said Kennedy. "The PPC-1 project ... will help to provide the additional capacity needed to support the government's NBN plans, and it will increase the competitiveness of the international capacity market, improving the price outcome for users of the domestic network."

Like M2's Bowen, iiNet's chief technology officer, Greg Bader, said that Pipe's impending arrival had been a "step jump" in terms of its costs, but benefits were being offset by increased demand.

"Bandwidth prices were ludicrous for many years, and they have been coming down but not at the rate that's keeping up with increasing consumption," Bader told ZDNet.com.au. In order of volume, the US and Europe still dominate incoming Australian traffic, but locally sourced and Asian-sourced traffic was showing fast growth.

"Customers are consuming more bandwidth and there are more of them," said Bader. While more traffic was being generated locally, thanks to, for example, Google's recent decision to host its content locally, international consumption is heading north too. The other high growth region where Australians source content from is Asia, according to Bader.

But in an NBN world where high bandwidth services such as IPTV may prevail, how much PPC-1, Telstra's Endeavour, Southern Cross or the Australia Japan Cable is used to carry international traffic will depend on how ISP's architect the delivery of content and may place greater emphasis on local networks.

"You could argue that domestic traffic could be more important. With IPTV, the requirement to have robust domestic networks increases. Realistically, all IPTV traffic will be sourced from Australia. A great example of this is English Premier League, which we stream in once, put into our own distribution system and stream it out domestically. That model is becoming more common," he said.

One of the issues that PPC-1 suffers in terms of its use as a US to Australia link is that it is a slightly less direct and higher latency route between the US and Australia than existing cables, such as the Southern Cross Cable Network, and Telstra's Sydney-Hawaii Endeavour cable, launched last year.

One industry source said that this will mean that a majority of ISPs will still mostly rely on Southern Cross, rather than Pipe, but according to Bader this isn't necessarily a bad thing since PPC-1 will be used as a preferred route to Asian content.

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Snow Leopard is finally here and we've had a chance to check out all the newest features and improvements to Apple's big cat OS. Check out our First Look video for an overview and find out if it's the right time to take the leap to Snow Leopard.

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in brief Telstra has expanded its Twitter customer support footprint with the takeover of the @Telstra account.

The account will handle customer support for the telco's mobile, fixed line and Foxtel services, wrote social media chief Mike Hickinbotham on the telco's nowwearetalking blog.

"We are gradually mak[ing] the shift from 'OMG — we're in social media!' to 'social media is just one of the many ways we are connecting with our customers'," wrote Hickinbotham.

Hickinbotham stated that the account was previously in the hands of a cybersquatter.

Telstra's existing BigPond support account will continue unchanged.

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Qantas technology tsar David Hall today laid out his vision for a more streamlined IT department at the airline that would move past what he described as its "transactional and sometimes antagonistic relationship" with other divisions.

In three years' time I'd like [Qantas CEO Alan Joyce] to say he has the best IT function of all aviators around the globe

Qantas tech chief David Hall

The self-described "quasi-chief information officer" — his formal title is executive manager of corporate services and technology — told a lunch held by the Committee for Economic Development of Australia that he envisaged Qantas could cut its IT costs by $100 million over the next financial year.

Already, Hall said, Qantas had cut its IT costs by about $20 million over the last quarter. However, last week, the airline revealed its ICT costs had risen 6.3 per cent overall to $406 million for the year to 30 June.

The executive did not give the Sydney audience — packed with executives from giant technology suppliers like Sun Microsystems, Fujitsu, Deloitte Touche Tohmatsu and KPMG — much detail around how the airline planned to take such a large amount out of its IT budget.

But he did lay out a few clues.

For starters, Hall pointed out, Qantas had gradually cut its IT department headcount from about 1400 back in 1997 to a total of 375 today.

This week the executive confirmed about 200 of its staff would be offered positions at IBM as the airline handed Big Blue responsibility for IT project delivery. However, Hall did not say whether the 375 total included that number or not.

Over the past months the airline has pursued a number of other outsourcing initiatives; switching desktop support suppliers from Telstra to Fujitsu and signing Perth-based IT services outfit ASG for further application support. Hall said Qantas now had a "leaner and more efficient business and technology team".

In terms of development of the airline's systems in future, the executive said he wanted to take a page out of subsidiary Jetstar's book, as it had made much greater use of commoditised and modular software than Qantas has been able to, due to its legacy platforms.

The IT functions of Qantas and Jetstar are managed separately "at the moment", according to Hall, but Jetstar CIO Stephen Tame reports to Hall.

Hall said Qantas was "in the final stages" of decommissioning its Q reservation and departure systems, with the airline having adopted the Amadeus customer management platform instead. The the airline's legacy environment is sizeable; Qantas currently has some 300 systems and 400 applications, according to Hall.

"Execution costs and overall complexity remain too high," Hall said.

On the supplier side, although Qantas had outsourced the majority of its IT function, outsourcing required "astute management", according to Hall. The airline has appointed a new head of commercial relationships, Paul Hanna, and Hall said he saw Qantas becoming a more demanding customer in future.

"We make no apology for this," he said.

In general, Hall said he wanted to move Qantas's IT department away from the "transactional and sometimes antagonistic relationship" it had had with the rest of the Qantas business, and to a position where it was seen internally as a "genuine and actual partner".

"In three years' time I'd like [Qantas CEO Alan Joyce] to say he has the best IT function of all aviators around the globe," he said.

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