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NBN's mission and business model

Question:

Discuss about the Business Experience Project for National Broadband.

The purpose of the current case study is to analyse the issues that are encountered by the National Broadband Network (NBN) Co. This is one of the major organizations in Australia that controls the wholesale market for the open-access data network and wired data network that deals with both wireless radio and wired forms of communication. The business organization was established in the year 2009 with the aim of development of the high speed communication technology. The main purpose of the network is to remove the barriers of communication. One of the main objectives of the organisation is to ensure that all the people in Australia are able to access high speed Internet service, which will help in the development of technological infrastructure of the society. One of the major issue and period that are encountered by people of Australia to access high speed Internet it is due to high cost involved in setting up the infrastructure. With wireless mode of communication it is possible for NBN to reduce the cost of broadband Access for common people.

In order to fulfil the mission NBN has set up the infrastructure that has allowed wholesale open access for the broadband network. This Access can be used by all local networks to improve the bandwidth speed. The Retail service providers are responsible for distributing user end Internet connectivity. This will help in the telecommunication field of Australia. It is also possible to generate a business environment of healthy competition in the telecommunication market. The customer in the market will also get the opportunity to choose from a wide variety of broadband network.

The comment of Australia has also published statement of expectation, which is a supplement to change the mandate of the policy. The ownership of NBN is among the Commonwealth of Australia which is a public sector organisation controlled by government policies. This is incorporated under the policy of Corporations act 2001. The operation is also controlled by Performance and Accountability Act 2013 (Alizadeh 2013).

The purpose of the NBN services to provide high Internet connectivity for both commercial and domestic purpose. As per the commitment of the organisation it is supposed to provide an Internet speed of 25 megabytes per second. The organisation is also planning to double the speed 90% of their existing areas. This is believed to unleash the technological potential that is possible due to Government support. The partnership of various retail sector units has made the Internet connectivity reaches out to various remote areas.

Infrastructure of NBN

The current case study is him to highlight up on the issues that are encountered by the national broadband network. In spite of the effective business plan of NBN, the organisation has failed to produce direct demand in the Retail Industry of broadband network. Hence, it is not possible for the customers to directly access the internet connectivity at lower price, which is one of the major aims of NBN. This case study will highlight up on major fact related to all the issues encountered by NBN and thereby will aim to highlight upon the issues that can help them in future sustainability

Alternative solution will also be provided in order to deal with the existing issue and ensure there is no disadvantage associated with current business model. Alternative solution will also help to provide proper documentation to deal with the existing issue. Appropriate planning is also necessary as a part of the recommendations that are provided as a part of the case study.

The section of the case study will focus upon the issues faced by NBN, which will be supported by facts and statistics. It is also important to identify the underlying cause for the issue, which will help in the matter of implementing relevant solutions.

One of the most common issues that are encountered in the management of NBN is due to low Internet bandwidth speed in many areas. This is a major challenge during the peak hours of a day, when all type of domestic and commercial activities are going at full speed. This is not only compromising up on the reputation of NBN, but also hampering the technological infrastructure in many parts of Australia. Nearby it is not possible for the people to get the advantage of high speed Internet service. As per the report of the statistics it is clear that 71% of the users associated with the service of NBN has encountered issues due to low Internet speed during peak hours. 28% of the users have also encountered total blackout. Most of the cases of Internet blackout or low bandwidth speed are reported during 10-12 hours and 14 to 16 hours (Katz 2012). It is important to mention that one of the major cause of the issue is due to the fact that it is not possible for NBN to deal with all types of infrastructural issues.

NBN is dependent upon local retail service provider in order to develop upon the infrastructure in every local areas of Australia. The findings of the recent reports suggest that the business partnership model of NBN with small scale retail service providers has failed. This is mainly due to the fact that it is not possible for the small scale retail organisation to bear the high cost that is involved in the process of setting up infrastructure for high speed wireless Internet communication (Li 2012). Hence, in most of the cases the national broadband network has not been able to provide the proper funding that is necessary to setup the infrastructure for high Internet speed.

Ownership and pricing strategy

Additional to all as far as the latest report the authority of national broadband network is not understanding the significance of the problem and thereby putting the blame for the issue on government organisation. One of the major organisational aims of NBN is to become financially independent and pay back all the dues paid by the government. Nevertheless, the basic principles that have been implemented by the organisation in deciding upon their pricing strategy have got their own loopholes. Hence, it is not possible for the organisation to collect enough revenue from the public. One of the major complaint raised by the organisation in the context is about the fact that the retail Internet providers are not buying enough Internet service from NBN. As the bandwidth service remain unsold, most of the servers are not operated by NBN, thereby resulting in slow speed of Internet (Nansen et al. 2013). One of the major fault of the government in this case is that they failed to provide the social value the high speed Internet project that have been initiated by the authorities at National broadband network. The social value need to be implemented with the help of reducing the complexity in the pricing model.

There have been an increased number of cases of blame game among the Telecom industries, which is not able to focus upon the Ultimate cause of infrastructural issues.

Acting as one of the wholesale distributor of Internet bandwidth, NBN charges a certain fee the installation of ISPs, which is dependent upon the speed of the bandwidth or the volume of Internet that will be consumed by the user. This fee is called the Connectivity Virtual Charge.  Nevertheless the main issue in this context is due to the fact that the government is charging a high amount of tax of 7.30 dollar per month as a service for end users. Hence, most of the Australian consumers are facing issues due to high level of pricing charged for accessing high speed Internet service (Falch and Henten 2010).

It is also believe that the issue of low Internet speed is also compromising up on some of the national social service like education and Healthcare. Hence, it is not possible to provide effective social service to the Australian consumers due to poor infrastructural condition. One of the issues that are believed to be responsible for infrastructure in pricing model of NBN is due to the initial failure of implementing business partnership theory.

Failure to generate direct demand

One of the bases of business model of NBN is dependent upon partnership that is formed with local retail Internet provider. However, the economics of the business of Indian is dependent upon the wholesale business model. Hence, it is not possible for the organisation to create retail business demand. The pricing model that have been introduced by the organisation have not initially analysed all the external threat.

In a given context it is important to mention about porter's five forces, which is believed to be one of the effective marketing tool to identify all kinds of external threat in a business environment. In spite of high demand of high speed Internet service, there is high level of threat from external supplier. NBN is highly dependent upon supply of fibre material from external business partners. The threat in this context is due to the fact that in the current scenario the organisation is only dependent upon few numbers of suppliers and thereby often has to pay high price. Moreover, there is the threat of new alternatives that can provide high Internet speed from that of the fibre cables. There are also new small scales Enterprise, who are setting up business to make use of the available opportunity in the Telecommunication industry. With the entry of new business organisation, who is offering high speed Internet service at much lower cost, NBN is also facing the threat from high power from the customer, as they have the option of purchasing Internet service at much lower price.

The tax level of the small scale Internet provider is mast were compared to that of the Internet service of national broadband network, which is lower almost at the rate of 50%.

From the previous section it is clear that one of the major issues encountered by the national broadband network is it due to poor level of funding in setting up of basic technological infrastructure needed for high Internet speed. Organisation also failed to identify all the external threats that are associated with in the telecommunication industry. This is mostly due to the fact that the company has not been able to generate retail demand and neutralize the threat of alternative service.

Due to all the issues and basic infrastructure level, it is not possible for the national broadband network to provide proper solution for the low Internet speed and blackout that are encountered in the middle of the peak hours.

Causes of low internet bandwidth speed

One of the effective ways to deal with the issue of Internet service provider is develop effective business partnership network with various industrial sectors in a technological domain. According to Given (2010), one of the major reason for success for the modern digital Revolution is due to the fact that most of the large scale electronic band are able to develop effective business partnership model.

One of the suitable solutions for the national broadband network in this context is to develop effective business partnership model (Cradduck 2011). This can help the organisation to get proper supply of raw materials that is needed to develop technical infrastructure and provide high speed Internet network in all parts of Australia. As mentioned in the previous section, the Internet service of national broadband network is dependent upon fibre cable and wireless Technology. It is important for the organisation to get proper supply of electronic parts and circuit that is needed to set up the Internet servers. Hence, Outsourcing of business service can be one of the proper solutions for National broadband network to deal with the existing issue of Internet blackout and low speed.

One of the major business advantages that the company can enjoy with outsourcing is the ability to improve upon the networking capability. They can also hire business ideas from large scale organisation like Cisco. Hence, it is possible for them to get the infrastructure and roadmap to implement safety in the networking business and provide secure intelligent information for all domestic and commercial uses in Australia (Alizadehand Farid 2017). They can also hire the Cloud Service network from large-scale organisation, which is believed to be one of the effective ways to improve the technological infrastructure of Internet bandwidth. In Spite of the business plan of NBN to local retail business partnership with local retail Internet providers; it was not possible for the organisation to increase the demand from the retail section.

With implementation of outsourcing business model it is possible for the organisation to develop business partnership with all small scale service providers and thereby able to successfully reach out to all types of stakeholders and meet up with the demand. It is also possible for the organisation to hire technical experts from third party agents, which is also believed to be one of the major advantages of business outsourcing.

On the other hand as mentioned by Nansen et al. (2013), one of the major disadvantages of outsourcing business for networking industry is due to the Complex level of policies that need to be implemented for smooth functioning of business operation. There is also high risk involved in the matter of security, where sensitive are classified information can get leak out due to increasing trends of Cyber criminals. The customers can also face issue due to authentication, as in many cases NBN has to hire Internet service from other business network. Additional it is also relevant to mention that without proper business set up, it is not possible to coordinate business partnership.

Alternative solutions

However, with effective business partnership and networking it is possible for the organisation to establish open network. This is believed to be one of the effective way to implement flexibility and provide adaptive solution to all forms of networking issue that are encountered in the modern day digital world (Wilken,et al. 2013). With the help of open network it is also possible for the organisation to provide more option to the customers and thereby ensure that they are able to meet up with the growing demand of the industry. The implementation of latest innovation can be encompassed with the open network, which will enhance the overall supply chain.

One of the major issues that have been encountered by the national broadband network is due to the fact that they have not been able to implement effective pricing strategy in their Service Delivery model. Hence, organisation can use the theory of marketing mix that is believed to be useful in deciding upon the pricing strategy. One of the major advantages of implementing effective pricing strategy is due to the fact that it is possible to collect important information from the networking business market (Diaset al. 2014). As mentioned previously one of the major issue encountered in the national broadband network is due to the high cost of Internet service it is mainly due to excess level of tax imposed by the Australian government. With effective pricing strategy it is possible to analyse the external business environment in the networking industry and thereby able to understand the taxation policy that are imposed by the government in the respective areas. It is often believed that pricing strategy is one of the crucial factors that help to influence upon the customer decision making process (Valle de Souzaet al. 2016). With the demand of Internet service going high in the current age of digitisation there are a lot of Internet service providers entering the market with and offering low cost service. The additional unique features are always welcome by the customers, which can help them to enjoy better Digital Service in personal and professional aspects.

Pricing strategy is also affected due to the fact that this one of the key element of marketing mix and thereby help to provide a better market position of the brand in the respective industry (Tiwariet al. 2016). It is often believed that service providers, who are able to provide the best cost effective network to the customer, are able to capture majority of the market share. This in turn helps to provide better brand image of the organisation. The leading brand in the respective industry has a major role to play in deciding upon the pricing strategy that is implemented. In other words, it is possible for the national broadband network to play an important part and deciding upon the cost of Internet service in Australia as they are one of the biggest public sector organisations, who are providing up with modern Internet service.

On the other hand, one of the major negative aspects of low pricing strategy is due to the fact that there is high risk of lowering of the service quality (Wilson 2014). In many cases it has been seen that large scale business organisation in order to control the market share lower the price of service by compromising upon the overall quality of service or product. In the given context of networking industry, where there is high level of threat from business rivalry, companies do have taken the risk of lowering the price which will help them to better sustain in the networking domain. Hence, the pricing strategy is believed to be effective in dealing with all major challenges encountered by the national broadband network in the current context of Internet service providing industry of Australia.

Conclusion

From the above case study it can be concluded that the national broadband network is currently one of the major Internet service provider in Australia, who have been able to succeed in the respective domain due to the application of latest form of Technology in the form of fibre wire and wireless communication. One of the major reasons for rising popularity of the high speed Internet service by NBN is due to the fact that they are able to deliver wholesale Internet communication service, which is usually achieved through business partnership with small scale Retail Industry. The small scale Retail organisations are responsible for providing better quality of Internet service to all domestic and commercial uses in Australia.

However, in the recent days one of the major issues encountered by the Internet service of national broadband network is due to the fact that they are not able to provide uninterrupted high speed Internet service. This is mostly due to the Internet blackout issues encountered in various places during the peak hour of the day. Failing to implement proper technological infrastructure at the initial period in many remote places due to lack of government funding is believed to be the root cause of this technical issue. Moreover, in spite of the business model of partnership it was not possible for the company to generate proper retail demand for Internet service, which resulted in lack of revenue income.

The government is also responsible for the existing issue due to the fact that it has not been able to promote the social value that is needed to improve upon the technological infrastructure of the Australian society and provide uninterrupted high speed broadband service.

One of the major possible solutions for the existing issue that has been mentioned in the case study is to outsource business resource in the form of advanced telecommunication network. This is believed to help the organization to lower the price of Internet service is there possible to outsource essential networking resource at much lower cost from third party agents. This can also encourage time to implement the solution of open network, which will provide the opportunity to the users to get the access of high speed Internet service. Nevertheless, it is important for the company to deal with Complex level of policy that is usually involved in matter related to Outsourcing business resources.

Another major solution that can be implemented is related with the pricing strategy. Here, it is essential for the organisation to collect necessary information from the external business environment and thereby able to implement proper solution to reduce the cost of high speed Internet service. However, it is essential to ensure that the quality of the service is not compromised while focusing upon low cost Internet service.

It is highly recommended for the national broadband network to follow and implement the policy of Outsourcing business service. As during the initial period the organisation has aimed provide networking service to the public in the form of retail sector, hence forth by implementing the policy of outsourcing business it is possible to increase the demand of retail unit. As the demand of the retail sector of high speed Internet service will increase, it will be possible for the organisation to generate more revenue and thereby improve upon the existing technological infrastructure. It will be there for possible for National broadband network to reduce the cost of high speed Internet service, which is one of the major existing issues.

It is also believe that the issue of Internet blackout is mainly due to the fact that NBN has not been able to properly utilise all the existing service that is needed for wireless telecommunication network. With more revenue generation it is possible to update the existing networking server and thereby improve upon the bandwidth. This will minimise the chance of any form of interruption that is currently causing all forms of issues of internet. It is also possible with the help of business Outsourcing to improve upon the human resource policy associated with the service of the networking business. Moreover, business partnership with large scale organisation like Cisco can help the national broadband network to hire advanced form of Internet server that in turn can help to develop the business model of the existing networking chain. As mentioned by Gunaratne et al. (2015), one of the crucial success factor of all networking business is to have advanced level of supply chain. With the help of business Outsourcing responsible for the national broadband network to improve upon their existing supply chain process.

Hence, it is highly recommended for the national broadband network the properly implement upon the policy of business outsourcing. Additionally, it is also necessary to ensure that no unethical policies are being adopted in order to set up business partnership with third party agents. It is also possible to ensure that all legal policies related to business partnership and outsourcing are being followed to ensure organisational adaptation of national broadband network.

Reference:

Alizadeh, T. and Farid, R., 2017. Political economy of telecommunication infrastructure: An investigation of the National Broadband Network early rollout and pork barrel politics in Australia. Telecommunications Policy, 41(4), pp.242-252.

Alizadeh, T., 2013. Towards the socio-economic patterns of the national broadband network rollout in Australia. State of Australian Cities, Sydney. Accessed December, 31.

Cradduck, L.M., 2011. The future of the Internet Economy: Addressing challenges facing the implementation of the Australian National Broadband Network (Doctoral dissertation, Queensland University of Technology).

Dias, M.P., Arnold, M., Gibbs, M., Nansen, B. and Wilken, R., 2014. Asynchronous Speeds: Disentangling the Discourse of ‘High-Speed Broadband’in Relation to Australia's National Broadband Network. Media International Australia, 151(1), pp.117-126.

Falch, M. and Henten, A., 2010. Public private partnerships as a tool for stimulating investments in broadband. Telecommunications Policy, 34(9), pp.496-504.

Given, J., 2010. Take your partners: Public private interplay in Australian and New Zealand plans for next generation broadband. Telecommunications Policy, 34(9), pp.540-549.

Gunaratne, R.L., Ilavarasan P, V., Fernando, S. and Rohman, I.K., 2015. National Broadband Networks of Malaysia, India, Indonesia and Australia: A Comparative Study. Competition and Regulation in Network Industries, 16(1), pp.23-46.

Katz, R., 2012. The impact of broadband on the economy: Research to date and policy issues. Broadband Series.

Li, G., 2012. The return of public investment in telecommunications: Assessing the early challenges of the national broadband network policy in Australia. Computer Law & Security Review, 28(2), pp.220-230.

Nansen, B., Arnold, M., Wilken, R. and Gibbs, M., 2013. Broadbanding Brunswick: High-speed Broadband and Household Media Ecologies: A Report on the Household Take-up and Adoption of the National Broadband Network in a First Release Site.

Nansen, B., Arnold, M., Wilken, R. and Gibbs, M., 2013. Broadbanding Brunswick: High-speed Broadband and Household Media Ecologies: A Report on the Household Take-up and Adoption of the National Broadband Network in a First Release Site.

Tiwari, S., Lane, M. and Alam, K., 2016. The challenges and opportunities of delivering wireless high speed broadband services in Rural and Remote Australia: A Case Study of Western Downs Region (WDR). arXiv preprint arXiv:1606.03513.

Valle de Souza, S., Dollery, B. and Kortt, M.A., 2016. Counting the cost: A critical evaluation of the Australian National Broadband Network roll-out under the Rudd/Gillard governments. International Journal of Public Administration, pp.1-8.

Wilken, R., Nansen, B., Arnold, M., Kennedy, J. and Gibbs, M., 2013. National, local and household media ecologies: The case of Australia's National Broadband Network. Communication, Politics & Culture, 46(2), p.136.

Wilson, N., 2014. Australia's National Broadband Network–A cybersecure critical infrastructure?.Computer Law & Security Review, 30(6), pp.699-709.

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