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March 17, 2020

Queensland’s newest backhaul provider ready to launch services

QCN Fibre’s chief executive Derek Merdith says the Queensland government backed backhaul provider expects to kick off services from April.  QCN Fibre — for ‘Queensland Capacity Network’ — was originally dubbed ‘FibreCo’ when the state government first announced the project.

“Currently, Telstra and Optus dominate the wholesale market in regional Queensland and this makes it harder for new players to get on the scene,” Queensland Premier Annastacia Palaszczuk said when the FibreCo initiative was detailed in December 2018.

“Fast and reliable Internet is vital when it comes to running a business,” said Palaszczuk. “And by using the government’s fibre optic network, we can provide significantly greater capacity than what’s currently available in regional Queensland.”

“The mission of QCN is to utilise the whole of the government’s infrastructure assets,” Merdith told CommsDay. “The advantage in Queensland is the government hasn’t sold any of the infrastructure.”

Initially QCN is using the electricity assets because “it’s an easy win,” he said: “They’re already running telco-grade Dense Wavelength Division Multiplex networks.” The company is jointly owned by Powerlink Queensland and Energy Queensland and will be using optical ground wire cables rolled out by the utilities.

“The physical infrastructure has been there for decades, and Powerlink has been running backhaul services for some of the major telcos for at least a decade,” said Merdith.

Merdith said that the plan is to also look at the infrastructure of other state-owned utilities, such as water and rail, that could potentially be used.

QCN will initially have access to at least 6000 kilometres of fibre. “We’re an agnostic wholesaler of backhaul into regional Queensland,” the QCN chief executive said. “So our target market will be all the carriers that don’t have their own physical infrastructure in Queensland.”

“We’ll just deliver raw Layer 2 services and Layer 1 services, if required, but we’re not going to provide retail-type products,” Merdith said. “We’re not doing voice, we’re not doing Internet; we’re just providing, effectively, wavelength capacity backhaul.”

The company is investing in new edge gear that will enable it to deliver gigabit speeds to its customers. QCN plans to offer 1, 10 and 100 gigabit backhaul products, and then “in the near future up to 200 or more,” the CEO said.

“Phase one” has involved connecting to the six regional NBN POIs in Toowoomba, Bundaberg, Rockhampton, Mackay, Townsville and Cairns. “After that, then we’re off to look at other towns as well,” said Merdith.

“It’s not a greenfield: we’re taking the current infrastructure of Powerlink and really turning it up. We’ve got the fibre in the ground. We already have a network,” the CEO said.

The final report of the Australian Competition and Consumer Commission’s Communications Sector Market Study, released in 2018, noted that in the least competitive regional and rural areas — including Bundaberg, Cairns, Mackay, Rockhampton, and Townsville — transmission costs could represent 50% of the total wholesale cost of an NBN service. That compares to just 13% in metropolitan areas.

QCN’s customers are expected to include tier one carriers as well as regional ISPs, with the aim of bringing down the cost of backhaul in regional Queensland.

In 2019, the Queensland government allocated $8.6 million over two years to support the project. In August last year QCN was granted a carrier licence by the Australian Communications and Media Authority.

Merdith joined the company earlier this year as its inaugural CEO. His previous roles have included Queensland state manager for TPG Telecom and AAPT.

The full board of QCN has been in place since July. Greg Young is independent chair, and Rachael Bauer and Jane Seawright are independent directors. Powerlink Queensland’s interim chief executive Kevin Kehl and Energy Queensland’s company secretary Jane Nant are member directors.

 

Article in Communications Day – 17 March 2020 – Reporter: Rohan Pearce