news Online group buying deals are finding favour with more and more Australians, going by sales figures. According to local emerging technology analyst firm Telsyte, the online group buying market generated revenues worth $498 million in 2011.

Starting in 2010, the online group buying industry with its exciting deals has lured enough Australians to become half a billion dollars worth in a short span of time. Some 5000 deals have been published and an average of one million vouchers sold each month. And market growth is expected to continue with more multinational players coming into the fray, better deals and loyalty programs to keep customers. Telsyte expects the group buying market to grow an additional 30 per cent in 2012, exceeding $600 million and reaching $1 billion no later than 2015.

Telsyte research reveals that physical products (such as jewellery, electronics and clothing) have been the best performing category, accounting for 30 per cent of the total market share. In a media release, Telsyte Senior Research Manager Sam Yip said, “Increased focus on physical product sales in group buying will change the face of the industry, and introduce competition between deal of the day and grocery and discount online department stores.”

2012 will be a year of continued market growth fuelled by the refocussing of group buying sites on driving customer loyalty, believes Telsyte. “In 2012 loyalty programs and targeted deals will continue to drive sales, while leading sites will enhance their mobile commerce strategies and expand their offerings,” said Yip.

The top eight group buying sites for 2011, which according to Yip generate about 95 per cent of the market revenue, were Scoopon, LivingSocial, Spreets, Cudo, Groupon, OurDeal, Deals.com.au, and Ouffer. In all, more than 80 sites were in operation in 2011, but Telsyte expects that the barriers to entry will increase in 2012 and some sites will fail due to lack of scale.

According to Yip, this year will see the local group buying sites compete with multinational players. This will mean bigger discounts, better quality deals, more offers and more loyalty programs to win over and keep Australian customers. The fourth quarter results show the continued rise of multinational group buying sites like LivingSocial and Groupon. Groupon was market leader in December 2011, while LivingSocial was ahead in Q4. Overall, though, it was Scoopon that was the market leader in 2011.

Image credit: Max Romersa, royalty free

news Pirate Party Australia has condemned the Labor Government’s plan to install compulsory full body scanners at Australia’s international airports in an attempt to strengthen anti-terrorism measures. The Party claims that these systems have repeatedly proven ineffective and that the privacy and economic costs far outweigh any supposed security benefits.

A statement issued by the party this week accuses the Government of propagating the myth that privacy invasion is essential for security. In light of the fact that existing laws and law enforcement authorities have successfully prevented the handful of planned terrorist attacks in Australia, the party questions whether new legislation is actually in the national interest.

The scanners are designed to locate metal and non-metal articles under clothing. This week, the Government plans to introduce legislation in Federal Parliament allowing for the scanners, following trials of the technology on 23,000 volunteers in Sydney and Melbourne. If introduced, the legislation will require passengers departing Australia to mandatorily pass through a full body scanner. With the exception of those with serious medical conditions, any passenger who refuses full body screening might be prevented from boarding their flight.

Branding the proposal ‘lunacy’, Brendan Molloy, secretary of Pirate Party Australia stated that he could not see the logic in installing full body scanners when the current ‘overzealous anti-terrorism laws’ seem to have checked terrorist attacks. “Why would the scheme be only international and not domestic? What security benefits are gained by banning those who would prefer a patdown from flying?” Molloy asked.

Refuting public concerns about modesty, Transport Minister Anthony Albanese was reported by The Age to have stated that the scanners produce only a generic outline and do not define any features. He assured that the images would also be unable to be copied or stored.

Speaking with Sky News, Albanese said that the scanners only identify areas on the body that need to be checked. The Government plans to roll out the new technology across airports from July 2012. The attempted Christmas Day 2009 attack on a US-bound flight by Nigerian underpants bomber Umar Farouk Abdulmutallab had prompted the government to announce plans in 2010 to beef up anti-terrorism measures at airports.

The Pirate Party also expressed concern over the continuing trend of opaque decision making by the Labor Government. The statement points out that the public has once again not been consulted by this Government about its intention to employ legislation that constitutes an attack on citizens’ civil liberties. “We have repeatedly seen plans and schemes negotiated in secrecy – ACTA, as a recent example – that threaten our rights, and have had no chance to raise our concerns until it is too late,” Molloy said. “Why would Australia adopt such a scheme given that cities such as Hamburg have rejected the system as unworkable? They are playing on fears to take away our civil liberties.”

Demanding answers to their questions, the Party has stated that the Labor Government cannot put in place such ‘draconian’ laws with public support. Labelling the proposal an ‘act of security theatre’, the statement calls attention to other successful strategies used in areas of serious instability.

“For example: Ben Gurion Airport in Israel has not had a terrorist attack since 1972, and they do not employ body scanners. Instead, they question all travellers about the purpose of their trip, and have a strong uniformed and plain-clothed security presence. The Government need to realise that throwing money and resources at an issue is not always the best approach,” concluded Simon Frew, deputy president.

news The Federal Opposition has again incorrectly alleged that it could save money by cutting the Labor Federal Government’s multi-billion dollar National Broadband Network project, despite financial projections which show the project is likely to make the Government billions.

The NBN is not listed in the Federal Budget as an expense because it is technically a government investment and will consequently not divert money away from other projects. This accounting technique has been verified by economists from the Parliamentary Library of Australia as an “internationally accepted accounting standard”.

In addition, in the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.

In an interview with ABC News 24 on Monday, Shadow Finance Minister Andrew Robb was questioned by presenter Lyndal Curtis on the Coalition’s ongoing claim that cutting the NBN would save money.
“On the question of spending NBN savings on easing traffic congestions, that’s a saving you then couldn’t book as a saving if you accept, which the Government doesn’t, that the NBN is effectively on the books. Is that promise, spending some of the money that you were counting on to save?” Curtis asked Robb.

Robb replied that the NBN was “borrowing money” — “$50 billion they’re going to borrow in the end, $37 billion we know for sure but it looks like another $50 billion”. “That’s got to come from somewhere. That’s money that could have been invested somewhere else, in a more productive outcome and whether it’s government money or private money, it is money that could be spent on things that would have far greater productivity improvement and we could be having an NBN at much lower cost,” Robb said.

“We could get the best of both worlds but the bottom line is that that money, it’s a combination of private and public. It’s money that is being very inefficiently invested. That money could be going to other purposes and government policy can help that happen but not necessarily always with government putting taxpayers’ money into the mix.”

However, it is believed that Robb’s statement that the money could have been spent on other matters is technically incorrect.

The NBN funding will not divert money from the Federal Budget, as it does not appear on the budget as an expense. And with the project expected to make money in the long term, cancelling it would mean the Government would not make the expected positive return on the project, meaning those extra funds would not be available in the long term for other projects. Ratings agency Standard & Poor’s reaffirmed Australia’s AAA credit rating in September 2011, meaning it is not likely that the Government will have problems using debt to fund the NBN.

Oversight
Separately yesterday, Robb demanded in a statement that Finance Minister Penny Wong “stop distancing herself from the NBN” and take a more active oversight role on a project which Robb claimed threatened “to be a massive drain on government finances”.

Robb has written to Wong in her role as shareholder minister for the NBN (Communications Minister Stephen Conroy is the other NBN shareholder minister), stating that the project needed heightened vigilance and accountability.

Robb called on Senator Wong to release monthly financial statements for NBN Co in her name. “In addition to updates regarding key financial activities, including equity injections, these statements should also provide updates in relation to contracts awarded, other acquisitions and expenses as well as staffing levels,” Robb said.

Robb said it had been reported that NBN Co had already awarded contracts worth more than $7 billion, but the public had “heard nothing from the Finance Minister about whether these decisions will present value for money to taxpayers”.

“What ‘red flag’ mechanisms are in place to alert Penny Wong to potential NBN Co activities that may not present best value outcomes and what veto authority does the shareholder minister have over decisions that are at odds with the interests of taxpayers?” Robb asked. “Penny Wong has tried to distance herself from the NBN which could prove to be the nation’s biggest white elephant, when she should be all over it. She has an obligation to become more actively involved and sharpen her clear oversight role,” he said.

So far, there has been no indication that NBN Co has blown its budget or had financial impropriety within its operations. The organisation reports regularly to the Federal Government, is subject to Freedom of Information laws, and also regularly answers questions from Labor, Coalition, Greens and independent parliamentarians through a series of parliamentary committees devoted to overseeing the project. The Federal Auditor-General also has the power to investigate NBN Co if it deems it necessary.

Wong, according to AAP, responded to Robb’s statement by stating that Robb’s assertion that there was no information, accountability or transparency was “simply unfounded”, with the Finance Minister to reply to Robb’s letter “in due course”.

Image credit: Office of Andrew Robb

In this post, Shadow Communications Minister Malcolm Turnbull responds to the claim that broadband pricing will not increase under Labor’s National Broadband Network plan.

“Now what’s going to happen here is because there is no competition, because this is a government monopoly and because they are spending so much money so they’re overcapitalising it, inevitably prices are going to be high.” — Malcolm Turnbull, 1 February 2012. [1]

But is that right? Some NBN supporters argue my comment is unfair and inaccurate. They reject any suggestion that the NBN will result in broadband costs that are higher than they would have been in its absence.

We need to get real about this. When you are committing tens of billions of dollars to replacing the entire existing infrastructure of a vital industry, you cannot be sentimental or self-deluding. There are no fairies at the bottom of the NBN garden to suspend the laws of economics.

By any measure the NBN is a massive investment. The Government says the direct capital cost of the network will be $37 billion and the peak funding required by NBN Co $41 billion. Most industry experts expect the eventual cost to be significantly higher, and some estimates exceed $60 billion.

It is difficult to demur: Let’s face it, what was the last Government infrastructure finished on time and on budget? Most projects that run over budget involve types of infrastructure where the likely costs, economic drivers and probable operational complications are well understood because of previous experience – the likes of roads, dams, tunnels and major buildings. But the NBN is entirely new in the Australian context; nobody has deployed a large scale fibre to the premises network in established areas. And insofar as there is one relevant point of comparison in South Brisbane, where Telstra is currently building an FTTP network, all publicly available information indicates that it costs a lot more and takes a lot longer than projected.

The NBN is also going to be a monopoly, given other fixed-line infrastructure will either be decommissioned or contractually prohibited from competing. So the only competition for carriage of broadband services will be provided by wireless networks, which in some cases will be a substitute product, but in many will not (as Senator Conroy is so fond of pointing out). The NBN in fixed line terms will be the only game in town.

Every enterprise wants to get a good return (ideally a high return) on its invested capital. If it cannot get a reasonable return then it won’t be able to meet its obligations to its lenders or pay dividends to its shareholders. However sometimes people do over-invest – whether it is the toll road that overestimates traffic volumes or the restaurant with an excessively flash fit out.

And if they are operating in a competitive market (if, for instance, motorists can take another route or diners choose another restaurant) they will find that the return they can earn is less than the cost of the capital they have spent, and have to write down the value of that investment. You have to meet the market price that is determined by your competition.

However where a business is a monopoly it is able to exploit its market power and charge much higher prices.

Of course, doing this is an integral part of the NBN business plan. Everywhere else in the world (and in Australia to date) HFC networks are used for high-speed broadband, and usually for voice traffic as well. In most markets the HFC networks belong to cable TV companies who compete fiercely with telco services delivered over fibre, copper or a combination of both.

However in Australia, Telstra and Optus are being paid billions NOT to use their HFC networks for broadband or voice precisely so they cannot compete with the NBN. Because the HFC networks were built a long time ago in fairly densely settled areas, Telstra and Optus would be able to offer comparable services and undercut the prices NBN wants to charge for its brand new FTTP network – resulting in NBN having to cut its rates to meet the market. So in order to prevent that happening, billions of dollars of taxes have gone to pay off Telstra and Optus not to compete.

All monopolies will attempt to charge excessive prices (extract economic rent) and so typically they will be the subject of regulation – as in the case of our water, gas and electricity providers. And that will be the case, to some degree, with the NBN which is generously proposing that it will not seek to earn more than the Government’s chosen benchmark of a 7 per cent return on its invested capital.

However, this begs the question as to whether the level of capital that is being invested is appropriate. In a competitive market a business cannot maintain high prices because it wants to get a particular return on its capital. Its customers will say “that’s your problem” and move onto a cheaper service or product.

This issue of the level of invested capital is a vexed one with regulated utilities. Many people, including Rod Sims (formerly head of IPART in NSW and now chairman of the ACCC) have argued that electricity distributors were encouraged to overinvest in their transmission and distribution networks because they were entitled to charge whatever prices were needed to deliver the return on their investment allowed by regulators – given that regulated return was higher than their cost of borrowings, it gave them an incentive to invest as heavily as they could. Regulators’ ability to declare particular investments as “unreasonable” were usually very limited – and according to Sims, this overinvestment has been the major factor behind the rapid growth in electricity prices. [2]

The Australian Energy Regulator Chairman, Andrew Reeves, recently warned against overinvestment or ‘gold plating’, saying it has led to sharp price increases:

“NSW and Queensland are getting more infrastructure than we think they need and we are required to approve price increases to pay for it. [3]

So let us re-examine the logic. A monopoly will always have the ability to charge higher prices than a business which is operating in a competitive market. An answer to that is to regulate the monopoly. But if the regulator simply requires that the prices charged by the monopoly only be constrained by a maximum allowed return on capital, that will still most likely result in higher prices – especially if the capital invested is far greater than is needed to deliver the services or products consumers actually want at a given point in time.

And the more desperate a Government is to prevent its supposedly ‘commercial’ investment from turning up as red ink on the budget, the more certain you can be that it will do everything in its power to recoup money from consumers and keep ROI up.

When the NBN Co talks about ‘flexibility’ in future pricing in documents submitted as part of its Special Access Undertaking, there should be no doubt what they are really talking about: sacrificing affordability. Analyst Ian Martin, for one, has noted that for the NBN business case to be viable, average wholesale revenue per customer will have to increase by 34 per cent from current levels.[4]

At the simplest level there is simply more capital earning a return. In its latest review of Telstra’s access charges, the ACCC valued the current Telstra network at just over $17 billion.[5] The NBN’s direct network capital cost is $35 billion in 2010 dollars or $41 billion in real dollars. Its peak funding requirement is higher taking into account the $11 billion (in after-tax 2010 dollars) paid to Telstra to shut down its network and migrate customers and $800 million paid to Optus for similar commitments. Whether these figures are counted as operational expenditure or capital expenditure is irrelevant from a customer’s point of view – any losses they lead to will be counted as recoverable capital, and thus contribute to the eventual level of charges for use of the network.

It would be wrong to assume that any prices so far offered by the NBN Co are sustainable. In its SAU lodged with the ACCC, the NBN Co included a consultant report conducted by Synergies Economic Consulting (available online here) which states:

“NBN Co has set its initial prices to ‘meet the market’ as a means of ensuring the smooth migration of end user connections from legacy networks to the NBN and to also meet the Australian’s Government’s objectives of setting wholesale prices to achieve the “broadband take up targets agreed by Government through the NBN Co Corporate Plan and Business Case”, again as set out in the Statement of Expectations”. (p.8)

As the consultants note, the low starting base for wholesale prices is an argument for granting NBN Co ‘pricing flexibility’ to recoup its costs at a later date: “the risks of having to price to ‘meet the market’ in accordance with government expectations, are best managed by providing NBN Co with a degree of pricing flexibility;” (p.9)

Until now, the deregulated Australian telecommunications market has typically led to falling nominal and real prices for most services. The nominal retail price of ADSL broadband fell by 69 per cent between 2005 and 2010, according to figures compiled by the OECD [6]. Between 1997-98 and 2008-09 inflation-adjusted prices fell 34 per cent for fixed-line telephone services and 49 per cent for mobile services, according to the ACCC. [7]

Compare that with what we know about the NBN’s plans so far. In terms of access, NBN Co has applied to the regulator for permission to raise nominal prices by 50 per cent of the rate of inflation, per year [8]. But note this restriction only applies to access – unlike current wholesale pricing, NBN Co will also be charging usage fees (via its CVC).

NBN also has made no commitments about its pricing of more sophisticated services such as multicast video. And in any case, if the NBN gets its way, the ACCC would have its power to enforce any price commitments offered in the Special Access Undertaking overridden by separate Wholesale Broadband Agreements (WBAs) NBN Co signs with individual retailers.

With barely 4000 users connected to the NBN after four years of Labor Government, NBN Co yet to report that it has earned revenue from selling broadband services, and completion of the rollout a decade away at best, claims and counterclaims about NBN pricing are at present entirely in the realm of theory. That is as true of the rate cards announced by various ISPs as any other indicator – we all know those rates can change.

But if anyone really believes all of the above points to NBN prices for broadband below where they would have been without it, I know someone who could sell them a very nice Bridge with views of the Opera House.

References:
[1] Interview with Ben Fordham on 2GB
[2] Sims, R., (2011), “IPart Concerned About Rising Electricity Network and Green Scheme Costs”, available online here. Professor Ross Garnaut also addresses the topic of overinvestment in electricity networks in a recent update on electricity prices (Garnaut, 2011, “Transforming the Electricity Sector”, available online here.
[3] Martin, P., (2011), “Pricing Rules Boost Power of Energy Suppliers”, in The Sydney Morning Herald, available online here.
[4] Martin, I., (2011), “A Significant Gap in the NBN Corporate Plan” in The Telecommunications Journal of Australia, Vol 61, No3, p.51.5 available online here.
[5] Battersby, L., (2010), “Action by the ACCC Slashed Telstra Value by Billions”, in The Sydney Morning Herald, available online here.
[6] OECD, (2011), Communications Outlook, p.293
[7] ACCC, (2011), Telecommunications Report, p.21 available online here.
[8] NBN Co, (2011), “NBN Co Special Access Undertaking”, available online here.

Image credit: Office of Malcolm Turnbull

news Australia’s interactive games industry is upbeat and prospects remain bright as consumption of games continues to thrive, according to a media release from Interactive Games and Entertainment Association (iGEA). The sentiments come despite latest data showing that there was a significant dip in ‘traditional retail’ computer and video games sales in 2011.

The latest data from independent market research group NPD Group Australia, which includes all revenue generated from console hardware, games software and gaming peripherals sold through retail, reveals a 12.8 per cent contraction to $1.5 billion from the corresponding 2010 period. However, iGEA CEO Ron Curry said this did not reveal the full picture as the rising popularity in digital games wasn’t reflected in the latest results. The NPD data excludes sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile games.

“As Australians continue to access video games through a host of different channels, it’s becoming more challenging to aggregate sales data through a single source. Whilst the NPD data has revealed a dip in ‘traditional retail’ sales, which according to our latest Digital Australia report still represents the lion’s share of the games industry, other research has pointed to the growth in digital downloads, multi-player online games, in-game purchases and online subscriptions,” said Curry.

Local technology analyst firm Telsyte’s estimate that Australians will spend over $450 million in online gaming subscriptions and in-game purchase in 2012 corroborates Curry’s view, according to the iGEA. Telsyte Senior Research Manager Sam Yip said in the organisation’s statement: “Online gaming subscriptions and in-game virtual goods sales are growing strongly in Australia, and will account for around 20% of the overall digital goods and online subscriptions market (which consists of 26 categories such as Internet video, Internet music and digital news subscriptions) in 2012.”

The iGEA media release also cited other reports that highlight the growth of the interactive entertainment market in Australia. PricewaterhouseCoopers forecasted revenue for both traditional and digital sales to reach $2.5 billion in 2015, with online and mobile games predicted to generate close to 50 per cent of this revenue; while IDC anticipated demand for handheld gaming hardware and software would rise by roughly 20 per cent in 2012.

Curry said: “Overall, we’re seeing a lot of evidence point towards a continuing healthy interactive games industry. The incredible success of games such as Call of Duty 3: Modern Warfare 3 which became the fastest entertainment property to hit the $1 billion milestone globally, eclipsing the previous record set in 2009 by the film Avatar, is only one example of this.”

Anthony Reed, CEO of Games Development Association of Australia (GDAA) credited the success of local games developers as a driving force behind the interactive entertainment market.

“Global consumer confidence in the digital space is encouraging exceptional growth in the Australian game development industry,” he said in the iGEA’s statement. “In 2011, Australian-made games featured highly across multiple digital platforms. For example, Brisbane’s Halfbrick Studios recorded over 120 million downloads of their smash-hit, Fruit Ninja, and 11 million for the recently released, Jetpack Joyride, and Melbourne-based IronMonkey Studios won Apple’s coveted ‘Game of the Year’ award with DeadSpace. Into 2012 we will see many more innovative and creative properties made by Australian studios releasing to a global audience.”

Some key statistics from NPD Group Australia:

• The majority of games (54 per cent) sold were rated G and PG
• The top 20 software sales featured shooter games, role playing games, dancing games, timecards and sports games
• The most popular genre are shooter and action (both at 19 per cent) followed closely by family games (16 per cent)

However, it’s not all good news for Australia’s video gaming industry. As chronicled vividly in an ABC article on the subject in October last year, many in Australia’s industry fear the local development scene is on the brink of collapse, after a string of studios — including KMM Brisbane, Pandemic, Krome, THQ’s Melbourne and Brisbane studios, Visceral Games and Team Bondi — have shut their doors in recent years. Developers have blamed the issue on the high Australian dollar.

Image credit: Screenshot from Epic’s Gears of War game

news Leading Australian online movie rental company Quickflix announced yesterday that US television giant Home Box Office (HBO) would invest $10 million for a strategic stake in the company.

HBO is the USA’s biggest premium television company and a wholly owned subsidiary of Time Warner Inc., a global leader in media and entertainment with business in television networks, filmed entertainment and publishing.

According to the terms of the investment agreement, HBO will invest $10 million in Quickflix in exchange for 83.3 million preference shares at a price of 12 cents per share. These shares are convertible to ordinary shares in the company, equivalent to a fully diluted interest of 15.7 per cent after conversion. The investment is fully endorsed by the Quickflix board, and is dependent on shareholder and Australian Stock Exchange (ASX) approval. The Quickflix board recommends that shareholders vote in favour of the investment by HBO and intend to vote any shares held by them in the same fashion.

Last week, Quickflix had announced that it had signed a content licensing agreement with HBO for streaming TV series and films in Australia. HBO will make its debut of television programming availability through Quickflix streaming, providing more than 500 hours of content.

Stephen Langsford, Quickflix executive chairman and founder welcomed HBO’s strategic investment in Quickflix. “Quickflix is achieving strong subscriber growth and we’re rapidly rolling out our streaming service. The funds from HBO’s investment will enable Quickflix to execute its strategy for growth and profitability,” Langsford explained.

Quickflix had launched WatchNow, its new instant movie streaming service in Australia, in November 2011, including a free trial in December for its subscribers. In January this year, the company had announced that it was enjoying a surge in subscriber growth, with the number of subscribers increasing by 24 per cent during the last quarter. There was an overall increase of 81 per cent in number of paying subscribers over the whole of 2011.

Earlier, in July 2011 Quickflix had revealed that it had raised over $4.6 million in funding through private investors, towards the company’s growing expansion plans for online operations. For this transaction, Quickflix had sold 55 million ordinary shares at a price of $0.085 per share.

opinion/analysis
This investment can only be a positive thing for Australia. If HBO is looking to invest locally, they are obviously interested in bringing their content to an Australian audience and finding channels for that. And, let me remind you, HBO is responsible for some of the greatest and most popular TV shows of the modern era. The Wire, true Blood, Real Time with Bill Maher, Curb your Enthusiasm, and recently, Boardwalk Empire, Treme and Game of Thrones. When it comes to great content which Australians love, HBO is packing some serious heat.

Image credit: HBO’s The Wire. Opinion/analysis by Renai LeMay.

news The nation’s number two telco Optus has released a clutch of National Broadband Network pricing plans aimed at small businesses, and has also revealed it will expand its consumer broadband plans in March, adding more bundles and 24 month contracts.

The company released its first tranche of consumer NBN pricing in November last year, with the plans being favourably compared to its current ADSL and HFC cable broadband pricing. The NBN plans are virtually identical to Optus’ current consumer broadband pricing.

The small business broadband plans released today come at six different levels ranging from $59 per month up to $129 base cost, depending on whether you purchase a bundled home phone line, and how much download quota you need per month (from 100GB up to a terabyte). They feature basic broadband speeds of 25Mbps, which is one of the NBN’s equivalent speed tiers to today’s ADSL broadband, but customers can boost the speeds of their Optus broadband connections in tiers, for $5, $10 or $20 per month. $20 extra per month, for example, will get you 100Mbps speeds on an NBN connection.

The other major ISP to have released NBN business plans is iiNet. In some areas, Optus’ plans are dramatically cheaper than those of iiNet. For example, an iiNet business NBN plan with 40GB of quota and speeds of 25Mbps will cost customers $84.95 a month. However, Optus has a 100GB plan with the same speeds for just $59 per month. At the top end, the two ISPs are more comparable — for example, a terabyte plan at 100Mbps will cost Optus SME customers $139 per month, and iiNet customers $129.95 per month.

Customers can sign up to either 12 month or 24 month contracts on the plan. The plans will come with what Optus is describing as its ‘NBN Wi-Fi modem’, although it did not clarify what brand or model that modem would be.

The packages also come with a package which Optus dubs its ‘OfficeApps’ email and collaboration licence. The package bundles Google’s software as a service Apps office suite together with the ability for small businesses to register their own domain name and associate it with their email account, and a bulk SMS package called ‘webSMS’.

As with its consumer NBN broadband plans, Optus’ new small business NBN plans are very similar to its existing ADSL/HFC cable broadband plans. For example, the company offers naked (without a phone line) business broadband packages ranging from $49 a month with 10GB of data, to $119 per month with a terabyte of data. The $59, $89 and $119 price points are virtually identical with those price points in Optus’ NBN business plans. And the same is true of its bundled offerings.

In a statement issued by Optus this morning, Rohan Ganeson, Managing Director for Optus SMB said: “The NBN opens the door for small businesses to take advantage of high speed broadband to do business in new ways, and make use of the latest digital tools to be more efficient and competitive. When you consider that 48 per cent of Australian SMBs don’t have a website and only four per cent are using cloud solutions such as web-hosted email, there is a huge opportunity for small businesses to embrace digital technologies.

“Optus NBN packages have been designed to offer great flexibility and value and make it easier for smallbusinesses to take the leap into the digital world, from establishing an online presence to reach new customers,to running their applications in the cloud for 24/7 access to business data. We’ve also combined OfficeApps with our NBN offerings for the first time to give small businesses that competitive edge and help lower their operating costs.”

“This is the first of many NBN packages Optus will offer to help small businesses make the most of the NBN to enhance and grow their business,” Mr Ganeson said. “As the roll-out progresses, we’ll expand our NBN packages to cater for larger offices and add more Optus OfficeApps inclusions to help businesses run their operations faster and smarter.”

The telco also noted that in March it was planning to expand its range of consumer broadband and home phone bundles and introduce 24 month contract plans.

opinion/analysis
Once again we see that Optus has launched a range of NBN plans which are virtually identical to its existing offerings in ADSL/HFC cable broadband, lending further credence to the idea that broadband prices will not be higher under the National Broadband Network.

Last week, I wrote on Delimiter that it was “factually inaccurate” for the Coalition to continue to claim that broadband prices would be higher under the National Broadband Network. The Office of Shadow Communications Minister Malcolm Turnbull has so far not responded to an invitation to comment on this issue. However, I would suggest that the release of Optus’ small business plans this morning is another nail in the coffin of that claim.

How long will it be until Turnbull and others within the Coalition admit they were wrong on this issue, or provide some evidence for their claims?

review Zelda’s in trouble again and the chosen one Link is the only hero who can rescue her, despite the tribulations of puberty being an ongoing concern. The Legend of Zelda: Skyward Sword takes its time to warm up, but when it does, there’s a lot to like about Nintendo’s last serious hurrah on the Wii.

Overview
I count myself fortunate that I can enjoy the myriad complexities of Skyrim and yet still sit down and find fun in the comparatively lightweight experience offered by The Legend of Zelda: Skyward.

Nintendo, borrowing from the playbook of its Super Mario series, has you chasing the elfin Zelda from dungeon to dungeon in an attempt to rescue her – at least that’s the impression you start out with. You play the role of awkward teen and Knight Academy novice Link, the only person in possession of a rare crimson “Loftwing”, or riding bird, and the fabled Goddess Sword, capably wrenched from its ancient plinth in daring Camelot fashion.

As with almost all previous games in the series, Skyward Sword isn’t a continuation, but a reboot featuring the same characters. We’re transported to an alternate dimension where enough constants exist to keep the escapades familiar, with sufficient differences that we’re not playing the same game in a slightly spicier marinade.

Skyward Sword isn’t immediately rewarding; the treats offered in the early stages of the game are scraps compared to the mid/late-game. For a good five to seven hours, there’s a lot of repetition and tedium, filler fetch quests and wasted minutes riding the clouds on your Loftwing. The situation does improve, but it’s entirely dependent on how long you’re willing to indulge Nintendo’s designers.

Speaking of design, if there are three techniques Nintendo’s mastered over the two and half decades of Zelda games, it’s layering gameplay, reusing content and hiding tantalising goodies in plain, but unreachable, sight. Ledges and chests will mock you from secure locations you’ll eventually penetrate thanks to bombs, digging gloves and a grapple (or Clawshot). Leaving an area uncleared the first time round will annoy completionists, but it’s a core element of the Zelda experience.

Nintendo’s also done a solid job of dressing up Skyward Sword’s linear adventure with what I can only describe as stuff. Hidden locations with reward-dispensing mini-games will keep you busy if you want a break from the story. Incremental item upgrades to strengthen your shield or amp up your slingshot add a traditional role-playing flavour previous games failed to provide in sufficient quantities. “Sword mowing” — cutting grass with a sword, in the finest Japanese historical tradition — continues to be a surprisingly lucrative occupation.

Ah yes, sword-fighting. If my Infinity Blade II review told you anything, it’s that I don’t want my input method to be the primary source of failure – the player’s skill level should be the deciding factor. Even with the massive strides Nintendo has taken to get its Wii Remote to act with your best intentions in mind, you’ll still shake your head when Link’s swordplay poorly reflects what your hands are actually doing.

This is more an observation that motion controls still have a ways to go, not a serious criticism of the game, as it handles the important aspects with generalised inputs, such as flicking the Nunchuk to block (which I found very satisfying). Swiping the remote will, 95 per cent of the time, result in a sword slash of some description.

Skyward Sword’s boss fights are as tricky as ever, requiring a puzzle-orientated mind to figure them out. If you’re not up for unravelling them yourself, you can lock onto your opponent and call upon “Fi”, the Goddess Sword’s science-fiction inspired guardian. Fi will deliver a sterile assessment of the targeted creature’s capabilities and weaknesses, a feature which easily makes my list of the game’s best.

Jumping and climbing are handled automatically, boiling potentially frustrating platforming segments down into manageable 3D puzzles. Just push the Nunchuk stick in the direction of a sensibly-sized gap and Link will do the rest. Snagging an overhead ledge requires additional input from the A button, but otherwise, it’s never a source of peripheral-tossing rage.

The nitty gritty: Play Asia‘s out of stock, but the ever-reliable OzGameShop is selling the game for $49.99. Locally, JB Hi-Fi’s offer of $79 beats out EB Games’ whopping $98. If you don’t own a Remote Plus or Motion Plus adaptor, add that to the shopping list. For the adaptor alone, most places stick closely to the $30 mark, while the remotes range from $59 to $68. Going to OzGameshop will shave a few more dollars of these prices.

My recommendation is that if you already have a remote, just get the adaptor. I was concerned about the additional weight and potential awkwardness from the remote’s extended length, but after an hour or so of play, I didn’t find either concern valid. Whatever you do, don’t go the eBay route – most if not all of the third-party alternatives use cheap sensors. You might get lucky with a decent one, but if you want to avoid disappointment, go with the official gear.

Conclusion
If you’re reading this review, you probably know what Zelda is by now. Skyward Sword is more of the same — reworked, and polished. My two major criticisms of the game are that it takes forever to get to the really good bits and the game plays it too safe with its admittedly well-trodden formula. If, like me, you’re not a Nintendo diehard willing to stick with a Zelda game until your bones are bleached white by the inevitable nuclear war of the 30th century, losing interest a few hours in is a distinct possibility. This links up somewhat with my second concern – the gameplay – which, while enhanced by the heavily motion-dependant combat and puzzles, never seriously engages those after a deeper role-playing experience.

Logan Booker is the for Kotaku Australia. From Monday to Friday, Logan operates a two-man indie game studio based in Melbourne. He’s previously worked as a game designer at Tantalus, writer for Firemint and editor of Atomic.

Logan Booker is the weekend editor for Kotaku Australia. From Monday to Friday, Logan operates a two-man indie game studio based in Melbourne. He’s previously worked as a game designer at Tantalus Media, writer for Firemint and editor of Atomic.

Image credits: Nintendo

news Former US whole of government chief information officer Vivek Kundra will hit Australia over the next several weeks for a speaking tour that will include events for his new employer Salesforce.com, as well as the Australian Information Industry Association.

Kundra has a long history working within government organisations at various levels in the US. He served as the director of infrastructure technologies at Arlington Country in Virginia in the early years of this decade, for example, before later becoming the state’s assistant secretary of commerce and technology. After that time he became the chief information officer of the District of Columbia. He had also spent time as the vice president of software firm Evincible.

When US President Barack Obama won the 2008 US election, Kundra was appointed to be the president-elect’s technology advisor. He was then named to the post of Federal chief information officer in March 2009, several months after Obama himself took office.

Kundra’s time in the US Government saw him preside over a number of major changes which have caused wider global ripples within the public sectors of countries such as Canada, the UK and Australia. Kundra, for example, was responsible for creating a whole of government IT dashboard through which government staff could easily gain a birds’ eye view of all major projects and IT expenditure across all departments. Part of the project was that each project had a picture of the accountable executive attached to it — usually a departmental chief information officer. The technology behind the dashboard is publicly available so that other jurisdictions can adopt it.

Another initiative undertaken by the US Government under Kundra was an initiative he dubbed “TechStat”. The TechStat toolkit was also made publicly available alongside the IT Dashboard. As detailed in a very useful article on the subject published by InformationWeek, TechStat sessions see an agency’s CIO and CFO, central government analysts and officials from related departments brought together with staff from the central whole of government office of the CIO to rapidly examine and evaluate the status and future prospects of a major IT project. In many cases, after reviewing a project’s current status and likely future, the government decision-makers simply cancelled the projects or rolled them into other similar iniatives in different departments.

Kundra was also responsible for pioneering a ‘cloud first’ strategy in the US Government which saw agencies required to evaluate cloud computing options prior to making any new investments in IT.
However, Kundra’s tenure within the US administration did not last long, with the executive leaving the government just two years after he joined it, in August 2011. He then joined Harvard University as a visiting fellow, before being announced as executive vice president of emerging markets for cloud computing vendors Salesforce.com in January this year.

Kundra’s time was not without controversies. A survey of IT professionals in government by online IT community MeriTalk published in September heavily criticised the executive. “Vivek’s tenure … was like a bottle of champagne — seems like a great idea, exciting start, but the plan’s unclear, and the next morning you wake up with the same problems and a sore head,” said Steve O’Keeffe, founder, MeriTalk, at the time.

In Australia, Kundra will speak at a press event in Sydney being held by Salesforce.com on Monday 13th February, and at the AIIA’s Cloud Summit in Canberra the following Wednesday.

Kundra’s tour of Australia has already attracted a degree of controversy, however.

The AIIA notified its members of Kundra’s attendance at its cloud summit in early December, noting that the executive would “lead a US/Australian dialogue on cloud computing”. It added at the time: “The dialogue will address how to eliminate obstacles to trans-border flows of data or information, while maintaining data security and privacy as well as law enforcement and national security. The two governments will explore the possibility of future dialogues on other digital topics of mutual concern.”

However, it is believed that the AIIA was not aware at the time that Kundra would be in January appointed a senior executive at Salesforce.com. It is unclear to what extent Kundra will be speaking at the event as a Salesforce.com executive, and to what extent he will be speaking as a former US Government chief information officer.

opinion/analysis
I was invited to attend Kundra’s press event in Sydney being held by Salesforce.com. However, I have declined to attend. In addition, I will not be reporting on anything that Kundra says at the AIIA’s event in Canberra, or on any other events that the executive speaks at in Australia. In short, I have decided that Delimiter will be boycotting coverage of Kundra’s attendance in Australia.

The reason is that I am personally highly disappointed in Kundra’s somewhat cynical early departure from the US Government and into the welcoming arms of leading cloud computing vendor Salesforce.com.

Kundra had a once in a lifetime chance, with his ascension to the CIO role in the new Obama administration, to make a great deal of systemic change in the US Government’s use of technology. And he brought a huge degree of effort, energy and innovative thinking to that initiative in the two short years he was in the post — creating several landmark programs which continue to have an impact on public sector technology thinking globally.

But then Kundra instantly undercut all of that good work by not following through on his efforts. After just two short years — which is a miniscule amount of time for the slow-moving public sector — the executive abandoned the US Government to its own devices and switched sides to work for a cloud computing vendor.

Kundra had a direct connection to the administration in the form of US President Obama. By leaving the Government, he left IT executives across the US public sector without that sort of high-level sponsorship for their initiatives. And by joining Salesforce.com, he has invalidated his government ‘Cloud First’ cloud computing push. Many within the US Government will be wondering to what extent Kundra was thinking of his future career when he made that push.

We’ve seen similar examples of top-level government IT executives joining vendors, with the most notable example being former Queensland Government chief information officer Peter Grant, who left his role in 2008 to become the State Director of Microsoft, a role he held for just over a year. In December Grant was reappointed to Queensland Government CIO role. However, Grant stuck around in the Qld Govt CIO role for longer (three years, compared with two) than Kundra did in the US Govt role, and he was obviously overseeing less dramatic change than Kundra was in the US, whose Federal public sector is an order of magnitude larger than anything we see in Australia.

My opinion is that Kundra should have stuck it out in the US for at least the first term of the Obama administration, and a second term if Obama won it. That way he could have driven real change in the US Government which would have affected generations of residents. Six years in government is about enough time to get some decent stuff done. Anything less is probably not enough.

In Australia, we do have some examples of public servants who have gone beyond the call of duty in serving the cause of technology in government. One of those is Department of Defence chief information officer Greg Farr, who helped completely reform the Australian Taxation Office’s IT operations and is now doing the same at Defence. Farr’s history within Australia’s government dates back a long time and recently earned him a Public Service Medal in the Australia Day honours.

Now that’s public service worth listening to.

Image credit: US Government

news The South Australian State Government today revealed that it would shortly be kicking off a huge new round of IT purchasing initiatives which would affect a string of major whole of government contracts, as part of its long-running Future ICT Services Arrangements program.

One of the aims of the program, which has been playing out over the past decade, was the realisation of South Australia’s intention to exit from its massive 10-year IT outsourcing contract with Texan giant Electronic Data Systems, with the deal to be broken up into a large number of chunks and farmed out, often to other suppliers.

The completion of that contract took place in 2007, but South Australia is still gradually working through a series of contracts which are gradually coming to full term, with the initiative being steered by the state’s whole of government chief information officer Andrew Mills.

In a notice published through the state’s tendering system this week, Mills’ office noted that on 7 March it would hold an open industry briefing to provide the industry with information regarding the next round of contracts to be signed under the Future ICT Services Arrangements program.

The state’s Minister for the Public Sector, Michael O’Brien, and its ICT Board chair, Jim Hallion will speak at the briefing. “Attendees will be given high level information regarding the State’s ICT sourcing directions with a view to supporting industry engagement in the upcoming market approach -‘Tranche 3 Services Expression of Interest (EOI),” the note states.

In late January this year South Australia updated its public status document (PDF) to detail which contracts would be within scope of the Tranche 3 contracts to be discussed at the briefing.

In that list, the state noted that it had recently completed negotiating a new client computing (desktop PCs and laptops) and server equipment panel, with new contracts expected to commence from February this year. Previously the state bought the hardware through Acer, Dell and HP, in a contract initiated back in 2006 and which had been slated to end on 30 June 2011. It is not clear which suppliers now sit on the panel.

The state is also currently negotiating a printer and photocopier equipment panel, with new contracts in that area expected to begin in July this year. It is believed that Canon, Fuji-Xerox, Kyocera-Mita and Ricoh currently provide the state with its photocopier needs, with HP, Kyocera-Mita and Ricoh working in the printer area.

In the briefing next week, the state will primarily look at telecommunications contracts, including managed network services, ISP services, mobile carriage services, telecommunications services in general, “active devices” contracts (for example, routers), PABX maintenance and electronic messaging (email). However, it will also look at its Microsoft enterprise contract.

In the past, suppliers such as Dimension Data, Telstra, Internode, NEC and Cisco have been the prime beneficiaries from new telecommunications contracts in the South Australian Government. Other major contracts not yet in scope for the state include mainframe computing, storage and hosting services.

opinion/analysis
So far South Australia is the only state jurisdiction which appears to be doing a decent job of managing its whole of government technology contracts, with every other major state appearing over the past few years to have dropped the ball completely in the area. We just don’t hear about many whole of government technology contracts from states such as Queensland, NSW and Victoria any more. And I’m not surprised, with a series of audit reports over the past few years making it clear that when it comes to the governance of technology rollouts, those states have a lot of learning to do.

So what would I like to see from South Australia’s Tranche 3 of contracts? Well, of course it’s hard to say where each vendor sits relative to each other at the moment.

However, in general, I suspect Telstra still has a huge lion’s share of telecommunications contracts in South Australia. I’d like to see some of that work farmed out to Optus, which has a good and growing enterprise division, and local player Internode continue to pick up as much Internet services work as possible as well.

When it comes to PABX gear, I’d like to see some recognition of the worth of shifting to modern IP telephony platforms, with Cisco and Avaya getting gurnseys in that area, as they’re the dominant players in that still emerging field. In switching, if that is in scope, it’d be nice to see Cisco given some competition by the likes of HP ProCurve. Switches in 2012 don’t always need to cost the earth.

As for email, if that area needs work, I’m sure an integrator like Dimension Data will pick up some work there. Realistically, for an organisation like the South Australian Government, Microsoft Outlook/Exchange is basically the only option. I’m sure there are still some Lotus Notes and even GroupWise installations in Adelaide which need to be “upgraded” to Exchange.

Did I miss anything?