Optus cable still luring users, ahead of NBN

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Optus cable still luring users, ahead of NBN

With the NBN still years away for many, Optus cable is still attracting people who want faster speeds than ADSL.


Optus has recorded a new peak in the number of broadband customers on its hybrid-fibre coaxial (HFC) cable network, as the telco prepares to migrate customers onto the National Broadband Network.

Despite an ongoing decline in the number of telephony customers on its cable network — from 503,000 to 498,000 between June 2011 and 2012 — the telco recorded a 1.7 percent increase in the number of those customers with broadband products, from 426,000 in June 2011 to 433,000 as of June 30 this year.

Though the growth is "modest" according to analysts, the number is a new peak for Optus, which has seen a decline in its overall cable customer base over the past four years, peaking in 2008.

Optus chief financial officer Murray King attributed the uptick in cable broadband  customers to the telco's 50GB free broadband offer, as well as "increased productivity" in sales channels.

Analysts said the growth was part of a move to take advantage of what remained of the cable network.

"There is value in incumbency, so it isn't surprising that Optus continues to promote and sell connections on the cable," Telsyte telco analyst Chris Coughlan told iTnews.

"For customers, some of which will need to wait many years for NBN, the HFC broadband solutions from both Telstra and Optus provide the highest throughput than any other fixed technologies they have access too."

Tony Brown, senior analyst with Informa Telecoms & Media, said rising demand for video services had fuelled greater growth in fixed line broadband generally, but the cable network particularly allowed Optus to easily bundle telephony, broadband and subscription television as significant services.

He said customers on cable networks in Australia were less likely to churn to the NBN rollout as those on slower ADSL speeds and that "even [fibre-to-the-home] poster child South Korea still has nearly six million HFC cable broadband subscribers".

Optus finished upgrading the cable network to the DOCSIS 3.0 standard last year, enabling customers to pay a premium for speeds of up to 100 Mbps on the downlink, much like those offered on the NBN.

But Ovum analyst David Kennedy speculated most customers on Optus' cable networks had opted for lower speed tiers — such as 25 Mbps download — than the 50 Mbps and 100 Mbps more typically identified with advantages from the NBN.

Cable deals cut short?

Moves by broadband customers to take advantage of higher-than-ADSL speeds on the cable network are likely to be relatively short-lived.

Under Optus' $800 million deal with NBN Co, which gained regulatory approval last month, Optus would migrate customers off cable and onto fibre once premises in NBN areas are deemed ready for service.

An Optus spokeswoman said large-scale migrations would begin from 2014, cutting short the contracts of newer or loyal cable customers.

Optus chief country officer Paul O'Sullivan said the transition would happen seamlessly, with the company looking to replicate its cable products on the NBN fibre network and potentially upsell existing customers onto higher speed tiers.


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