NBN Co chief executive, Mike Quigley, has defended the decision to build two Ka-band satellites for the National Broadband Network (NBN), arguing the move was the "right answer".
The two Ka-band satellites are intended to deliver broadband to the 3 per cent of households that fall outside the NBN's fibre footprint and LTE fixed wireless network. The satellites will deliver initial peak wholesale download speeds of 12 megabits per second and uploads of 1Mbps.
At a senate estimates hearing, Quigley said the contract was the culmination of a two year procurement process in which the company looked closely at whether it could access the required capacity from existing providers.
"It would make our job much easier if the required capacity was available with existing satellites but it simply isn't," Quigley said. "The capacity we are leasing on the interim satellite service is costing us multiples of the cost of the equivalent capacity on the NBN Co satellites.
"Put simply there isn't enough capacity for our purposes and having the Australian taxpayer own these new satellites is the right answer."
Quigley welcomed comments from Optus chief, Paul O'Sullivan, in which he noted the interim Ku-band satellites being provided by the telco could not handle the required speeds and traffic of the NBN.
"The difference is really the way in which the spot beams are tailored and focused in order to carry traffic and we carry mainly broadcast type content -- video, television programming etc -- that's quite different than the Ka-band which is used for broadband," O'Sullivan said.
"We could carry this traffic but we would not be able to do it with the speed, economics and capacity that a Ka-band satellite can do it with so that's the reason they've chosen to go that route."
According to Quigley, the move is a positive one for rural Australians and is not simply a case of "providing a Bentley when a Falcon will do, but providing an adequate service to people who need it".
NBN Co announced the $620 million contract for the new satellites with satellite manufacturer Space Systems/Loral (SS/L)
SS/L will also supply the telemetry, tracking and command systems for NBN Co's Long Term Satellite Service, an investment worth about $2 billion.
Not surprisingly, shadow communications minister, Malcolm Turnbull, attacked the decision to build the new satellites with claims the move was "wasteful" due to the satellites' spare capacity, and costly.
"At the expected cost of $1 billion to build, launch and operate two satellites built from scratch, NBN Co is spending over $10,000 for each of the 106,000 households its Corporate Plan says will be using satellite broadband in 2021," Turnbull said at the time. "That does not even account for the other costs required for the satellite portion of the NBN, such as installing receivers at remote premises."
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