Telstra CTO: “The biggest challenge is supporting the massive growth in data cost effectively”

Hugh S Bradlow, CTO, Telstra is speaking on the smart home revolution on Day Three of the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. Ahead of the show we speak with him about his views on traffic management and where carriers can add value for consumers.

What were the big milestones for Telstra in the last 12 months?

Last month we announced a dramatic expansion of our 4G service in Australia. Encouraged by reaching over 500,000 4G customers in less than 12 months, we are now set to more than double our 4G coverage area in Sydney, Melbourne, Brisbane, Adelaide and Perth, extending to approximately two-thirds of the population within the next ten months.

Where do you stand on bandwidth caps, line throttling and traffic management?

Usage caps have been part of the Australian internet scene since the beginning. Economist J.K. Galbraith once described Australia as the “biggest mistake in position God ever made”, so access to the internet in the early days was constrained by the cost of the overseas links, hence the introduction of usage caps. When users exceed their usage cap on fixed broadband, we may throttle their lines down to dial up speeds. This helps to avoid bill shock and is good usage management practice. We do not currently implement traffic management. However, these practices are increasingly being used by ISPs outside Australia to ensure fair usage of internet resources amongst users.

There is often criticism that ISP and governments are not rolling out networks that are fast enough – but we also hear that few customers are yet paying for higher speeds? Why is there such a disconnect?

Users perceive the value that the applications and services deliver to them. As long as the network does not inhibit the performance or reliability of those applications, they do not perceive the value in the network. It is only when the applications exceed the capability of the network that they see the value in upgrading.

Many see OTT services as a major threat? Do you?

We see OTT services as part of a suite of functionality that delivers value to our customers. As such, we try and ensure that our customers can get access to the services that they desire and require and facilitate this where possible.

Where can the carriers add value for the customer?

The business of carriers is to be service providers—we connect customers to the technology solutions that they want to use. We can add value by creating reliable, consistent, low latency, high throughput network services, by helping customers restore services in the event of inevitable failures and providing them with support through stores, contact centres and online channels and by offering them additional functions and features such as video conferencing services.

Could 4G services affect the demand for superfast fixed line broadband?

Telstra has long said that we view fixed and mobile broadband as complimentary services. There will be a degree of substitution between fixed and mobile services, however, even high speed wireless technologies are a shared access medium and thus less suited than fixed broadband to delivering media-centric services such as high definition video on demand. I believe there will continue to be strong demand for fixed broadband services as the importance of video services continues to grow.

Net neutrality has been enshrined in law in the Netherlands. What’s your stance on this?

My stance is that rigid rules dictating how technically complex systems such as networks, particularly mobile ones, operate would stifle innovation and reduce competition. As long as ISPs are clear and transparent about the way their networks operate, consumers should be allowed to choose the service that best suits their individual needs.

Is there enough innovation in the industry? If so, can you provide examples?

The telco industry by its nature is about making big capital bets so you cannot afford big risks. However, there is plenty of innovation in the industry. To cite a Telstra example, in 2006 we launched our Next G network. At the time we chose to launch WCDMA at 850MHz in order to make our 3G network our coverage network. This was seen as radically different from previous 3G launches where the 2G network remained the coverage network. However, as a result we cover in excess of 99 pre cent of Australia’s population with a 3G network that now has HSPA across the entire network and is more than three times larger in terms of coverage area than our 2G network.

What are the major challenges that you expect to face in the next few years?

I think that everyone in the industry recognises that the biggest challenge is supporting the massive growth in data demand cost effectively. However, I believe that there are some additional challenges: on the mobile side, battery life is becoming a bug bear for many devices, particularly smartphones; network consistency—by which I mean coverage and capacity as well as reliability i.e. the ability to be sure that you will get the network service you need when you need it—is going to be vital, as services increasingly become cloud based. For full service operators such as us, the ability to deliver value to our customers in terms of services and features is also critical.

What are you hoping to get out of attending the Broadband World Forum 2012?

The Broadband World Forum is one of the events on the global calendar where you get a gathering of the whole industry. It is a chance to hear what others are doing, garner ideas for innovation and to meet industry colleagues and share ideas and experiences.

With the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, less than a month away, there is still time to register your interest.

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