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Rural broadband: Japan eyes 5G, while Oz seeks more NBN cash

One telecom problem never goes away, which is how to make sure a network reaches everyone.

In the digital economy era, it's arguably become even more important. But, as the GSMA is fond of pointing out, existing universal service programs are focused almost solely on fixed networks -- an anomaly in an era when mobile subscribers roughly outnumber wireline subs by six to one.

Right now, we see Japan, Australia and Hong Kong grappling with this in very different ways.

Japan and Australia are considering new taxes, while the Hong Kong government is directly subsidizing fiber construction.

What's interesting about Japan's thinking is its focus on 5G.

Currently all Japanese mobile and wireline customers pay a monthly fee of 2-yen (less than 2 cents) to fund the universal service obligation imposed on NTT East and NTT West.

Now the communications ministry is considering charging Internet users a fee to help fund fiber infrastructure to support 5G networks in rural or uneconomic areas.

Under the scheme, ISPs delivering service over existing fiber access networks would collect a monthly charge from users that would cross-subsidize rural infrastructure rollout, Japan Times reports.

The Australian tax couldn't be more different. For one thing, it's a levy on telcos, not users. For another, it's aimed at cross-subsidizing the notorious NBN Co, and not 5G or any other specific service.

Introducing the legislation in November, Communications Minister Paul Fletcher said the money would "fund the losses NBN Co incurs in constructing and operating its fixed wireless and satellite networks, replacing the company's opaque internal cross subsidy from its fixed-line networks."

In other words, after years of taxpayer investment in NBN Co, users are now being asked to deliver a further subsidy. (See After ten years and $34B, Australia's NBN falls short.)

"This looks like a way to try to shore up the value of the NBN to try to avoid a write-down … rather than a solution that maximizes the value to the economy," wrote financial analyst Andreas Lundberg.


For more fixed broadband market coverage and insights, check out our dedicated broadband content channel here on Light Reading.


In Hong Kong, the government is taking a hands-on approach, tipping $100 million directly into a scheme to fund fiber rollout to rural villages.

Despite the city's densely crowded urban areas, most of the territory is either national park or rural or semi-rural. About 10% of the population lacks access to high-speed broadband.

The scheme is officially targeted at home broadband rather than 5G, but the government subsidy will ensure backhaul is already provisioned to support future 5G mobile or FWA.

The $100 million may not be enough, however. The original tender last June successfully contracted local telcos for most of the villages.

But not a single bid was received for the trickiest part, to deploy to the outlying islands, including the installation of three new subsea fiber links. The tender was re-issued last Thursday.

— Robert Clark, contributing editor, special to Light Reading

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