Residential Development

The shortfalls of using a utility supplier for your building’s internet

There are plenty of choices available for a developer when choosing energy, gas and network services. To simplify this decision-making process, embedded network providers combine energy services within their offering, providing the owner with a single bill as an ‘everything’ supplier.

While previously delivering energy services to apartment complexes, embedded networks are now looking at including internet services within their offering to developers. While a developer or building manager may see this simple add on as a good idea, it is essential to look at what you are getting.

Before we get into this, let’s take a look at what an embedded network is and their position in the market.

What is an embedded network provider?

An embedded network is defined as a company that physically aggregates the energy consumed within a complex to a single metered point. Rather than an individual tenant negotiating with electricity retailers, the building owners will sign an agreement with the utility retailer who then distributes to the whole development.

These agreements can often extend to 20 years. With growing numbers of apartment developments around Australia, embedded network companies are becoming more frequent. The number of residential embedded networks rose from 147 in 2012 to 1,358 in 2016, largely on the back of convenience of combining individual energy components.

The Issues with treating Internet as an add-on

There are a few reasons why an embedded network provider falls short when it comes to providing internet connectivity. The most prominent reason is simply, an embedded network provider doesn’t have the experience in operating telecommunications networks.

Under the Telecommunications Act 1997, a provider cannot operate a network unless they obtain a carrier license. To avoid registering as a network operator and providing infrastructure, the utility companies then outsource to the NBN and bundle it in with electricity and gas; delivering internet by acting as a carriage service provider (CSP).

What does this mean for the developer? At the end of the day, the developer receives an NBN connection to the development whereby they usually experience upfront costs per apartment, delays upon completion and underwhelming congested speeds for their residents.

The developer is also left with the ambiguity around who is responsible for upgrades, maintenance and more importantly, continuity of service and support for the building and residents. Is it a matter for the embedded network provider to address, or do they pass the issue to the NBN or retailer? Who is accountable, to what service level and response time? These are crucial aspects that a developer must look at when considering a network for their building.

It has become ever more frequent for developers to move away from the NBN to alternative network carriers to avoid NBN shortfalls. So is it worth returning to the ‘old’ default to and risking quality for your end users?

What’s the takeaway?

While the appeal for an everything aggregator may seem appealing for developers, it is essential to understand what you are getting. Developers have moved away from NBN connections due to its shortfalls.

VostroNet Network

VostroNet provides a high-speed wholesaler network to new multi-dwelling unit developments. VostroNet seamlessly deploys its own direct fibre links to sites and works with developers to ensure they receive a future-proof infrastructure for their development.

VostroNet maintains and upgrades the network post-build which means the building manager, and residents receive immediate support if there is an issue with the network.


For more information about our services contact VostroNet