Presentation by Serial Entrepreneur, Bevan Slattery at Commsday Summit 2016 on Future Thinking around the future of data centres, cloud, connectivity both in the Australian marketplace and globally. Also presenting some "napkin maths" on the rise of 5G and what that means to the Australian marketplace the NBN

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© Superloop - April 2016
Commsday Summit
2016 Presentation
Future Thinking

2. BY 2020 TRADITIONAL
COLOCATION
WILL DECLINE

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BY 2020 TRADITIONAL COLOCATION WILL DECLINE
Growth in cloud compute and cloud apps (Google Apps, O365 etc.)
Cloud Providers using “build-v-buy” to drive data centre pricing lower. Already
seeing major DC providers $/MW decline
First wave of significant pricing disruption to be felt as first major wave of
Cloud Compute cores to be decommissioned
Older specialised corporate “whitespace” DC’s will probably close down
Consolidation of DC providers to those with the cheapest cost of capital
Best ecosystems last/least affected

4. By 2022 CROSS
CONNECT REVENUE
WILL LIKELY PEAK

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BY 2022 CROSS CONNECT REVENUE WILL LIKELY PEAK
Elastic Interconnection to become the norm
Disintermediation of connection to a network/service at a facility to connecting to
it on a fabric
Merchant Silicon/SDN is already starting to disrupt in terms of capex, cost,
functionally, but also footprint/opex, but hit supernova in 2018/2019
40G/100G optic pricing will become commodity
Largest Ecosystem “wins” - independence is key

6. AUSTRALIA WILL
BECOME THE MOST
EXPENSIVE BROADBAND
IN THE DEVELOPED
WORLD

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AUSTRALIA WILL BECOME THE MOST EXPENSIVE
BROADBAND IN THE DEVELOPED WORLD
CVC Charge/Congestion Tax - Galactically stupid pricing
121 PoI Tax
NBN Monopoly - no natural competitor/no price tension
NBN Monopoly further enshrined as Government looks to “sell” and maximise
return through protection guarantees (Telstra float anyone?)
Cost of international capacity will remain cheaper than cost of CVC costs
Compounded as ULL/SS/xDSL services get turned over - TPG greatest
affected

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CHECK OUT TPG ARPU’s

9. ‘GOLDEN ERA’ FOR
LAST MILE OWNERS

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‘GOLDEN ERA’ FOR MAJOR LAST MILE OWNERS
All this growth in cloud services require connectivity to premises
True convergence of communication using cloud apps will require significant
capacity and seamless connectivity in the workplace
Operators with critical mass and coverage will continue to grow and increase
coverage through incremental sales, scale and consolidation
Some potential attempts at disintermediation of the access layer from major
cloud providers looking to reduce the cost/barrier to interconnect to their
infrastructure

11. 5G BECOMES A REAL
ALTERNATIVE FOR
TPG (AND VODA)

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5G BECOMES A REAL ALTERNATIVE FOR TPG (AND
VODA)

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5G BECOMES A REAL ALTERNATIVE FOR TPG (AND
VODA)

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TELSTRA’S GRAPH

15. BACK OF THE NAPKIN

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2.6PB WITH AN AVERAGE UTILISATION OF 75% =
2,600,000GB (1Mbps = 10G/day)
260,000Mbps
260,000Mbps/0.75
Peak = 350Gbps
350Gbps>iiNet’s international traffic last year (pre-Netflix affect)

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TELSTRA LEARNING FOR TPG AND VODA (AND NBN CO.)
4G network ran at 350Gbps nationally without problem
5G with increased spectral efficiency and the right spectrum should produce
500Gbps to 1Tbps+ of access
FttB locations doubling up a pico cell/wifi hand-off sites could possibly handle
2Tbps+ of access connectivity

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WHAT DOES THIS TRANSLATE TO?
2Tbps * $17.50 = $35m/month or $420M per annum in annual CVC savings
1Tbps = 1,000,000 users download 1Mbps concurrently or 300G per month
2Tbps = 2,000,000 users on a 500GB plan with an average 60% utilisation
2Tbps = 10,000,000 users on a 100GB plan with an average utilisation of 60%
10,000,000 users @ $40/month = $4B in revenue
Vodafone today has around 5m subs with average $70 ARPU for $3.5B in
revenue. Just saying...

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QUESTIONS?