May 17, 2020

What has gone wrong with Australia’s National Broadband Network?

Australian National Broadband Network
Australian telco industry
fibre optics
broadband
Tom Wadlow
3 min
NBN
Australia’s government-owned National Broadband Network (NBN) has been subject to a torrent of negative press.

Set up in 2009 to replace dated infras...

Australia’s government-owned National Broadband Network (NBN) has been subject to a torrent of negative press.

Set up in 2009 to replace dated infrastructure such as copper cable networks, NBN is designed to give all Australian consumers and businesses access to broadband over fibre, fixed wireless and satellite technologies. The original proposal, now being promised by the opposition Labor party, was for a full fibre rollout.

Retail service providers offer services over the new infrastructure, not dissimilar to Openreach in the UK, an organisation also under increasing fire over the pace and quality of its work.

Cited as Australia’s largest infrastructure project ever, NBN has also been a bone of political contention over recent years, with current Prime Minister Malcolm Turnbull vowing in 2010 to demolish it if his party won power. Fast-forward to 2017, and the NBN saga still rumbles on.

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The enormity of the project appears to have caught up with the state-owned enterprise, most recently highlighted by the industry ombudsman’s damning report into the number of complaints made by B2B and B2C customers.

Complaints about NBN services have risen by 159% in the space of a year, with the majority of unhappy customers witnessing service faults and frequent delays. For the first time, complaints about broadband and internet access outstripped those about mobile phone providers.

NBN, while saying these findings were regrettable, said it had connected another million premises over the past six months. Around half of the country is now connected to the network, but take-up has been slower than expected, as prices remain high whilst speeds remain well below those advertised, something which the country’s competition watchdog (ACCC) has kept its eyes on.

ACCC Chairman Rod Sims said in July: “The move to the NBN and the way in which NBN technologies work mean retailers need to dramatically re-think the way they talk about typical speeds and ensure consumers are presented with the information they need.”

NBN and telcos are at loggerheads over the issue, with the former knowing exactly how much capacity each telco is purchasing and whether it is enough to ease congestion. It says retailers are not purchasing enough bandwidth to provide adequate services. ISPs say that NBN’s charges are too high to be commercially viable to them.

What was intended as a harmonious public-private enterprise to make Australia the most connected nation on earth has left serious doubts about the ability of government and business to deliver such a huge project convincingly. Look across the Tasman Sea to New Zealand, and you will find faster speeds being delivered at similar costs to those offered by NBN.

The government recently announced a review into the failings of the project. Many commentators simply say that the business model, whether all fibre or a mixture as is now the case, was doomed to fail from the start. What does appear obvious is that this compromised mixed-solution rollout is costing far more than any key decision maker in 2009 anticipated. 

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May 4, 2021

Verizon to sell Yahoo and AOL for $5 Billion to Apollo

Yahoo
AOL
investment
Verizon
Tilly Kenyon
2 min
Verizon has offloaded its media business to Apollo Global Management in a deal valued at $5 billion
Verizon has offloaded its media business to Apollo Global Management in a deal valued at $5 billion...

US telecoms giant Verizon is selling its media assets, which includes Yahoo and AOL, to Apollo Global Management, a US private equity firm in a deal worth $5bn (£3.6bn). Verizon will retain a 10% stake in the company, which will be known as Yahoo at the close of the transaction and continue to be led by CEO Guru Gowrappan

According to Verizon this corporate carveout will allow Verizon Media to aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners, and nearly 900 million monthly active users worldwide. 

“The past two-quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well-positioned to capitalise on market opportunities, media, and transaction experience and continue to grow our full-stack digital advertising platform. This transition will help to accelerate our growth for the long-term success of the company.” said Guru Gowrappan, CEO, Verizon Media.

Dominating the internet

Yahoo and AOL once dominated the internet but were subsequently overshadowed by firms like Google and Facebook, instead, they both became giant publishers. Yahoo Sports is a popular destination with sports fans, and Yahoo Finance provides a wealth of information for retail traders. AOL acquired a variety of early media brands, including the Huffington Post (now HuffPost), TechCrunch and Engadget, and several digital ad-tech companies to create a giant platform for advertising. Verizon bought Yahoo in 2017 and AOL in 2015 for a combined $9bn, so are selling at a considerable loss. 

“The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.” said Hans Vestberg, CEO, Verizon. 

The sale by Verizon comes after it disposed of blogging platform Tumblr in 2019 and news website HuffPost last year. Under the terms of the agreement, Verizon will receive $4.25 billion in cash and preferred interests of $750 million. The transaction includes the assets of Verizon Media, including its brands and businesses. 

The transaction is subject to satisfaction of certain closing conditions and expected to close in the second half of 2021.

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