Why Launceston is plugging into the ‘gigabit city’ revolution

What happens when you put an ultra-high-speed internet connection into a rural town? Launceston, Tasmania, is about to find out.

On 30 May, Launceston-based telco Launtel flicked the switch on Australia’s first ‘gigabit’ connection, an internet connection roughly 45 times faster than the NBN’s most popular wholesale option.

Launceston was one of the first areas in Australia where the NBN was rolled out, so it has the potential to deliver ultra-high-speed connections.

However, nobody had stepped up and found a way to deliver a gigabit service.

Launtel Director Damian Ivereigh told The Pulse that after brainstorming in November last year, the telco decided to take the plunge.

But businesses willing to pay the high cost of a gigabit connection right now are few and far between.

After some fancy footwork on the business model and cutting a deal with the bandwidth wholesaler, Launtel was able to offer the service to 30 businesses – but that’s just the start.

Ivereigh is betting that much in the same way settlements cropped up around sources of water, the businesses of tomorrow will cluster around ultra-high-speed connections.

After all, it’s happened before.

Why gigabit cities are a big deal

The example people hold up when discussing gigabit cities is Chattanooga in Tennessee.

Like many American rural towns, it was shutting down businesses left and right as young people migrated to larger cities to chase work and start their lives.

But back in 2007 the local council made a $200 million game-changing decision – to fund local utility to build a fibre network capable of becoming America’s first ‘gigabit city’.

From there, high-tech businesses started to move into town – attracted by the possibility of doing things that they couldn’t do before.

For example, medical researchers could use Chattanooga’s high-speed network to build 3D models of aneurysms to allow surgeons to pre-plan operations.

Businesses like design firms that regularly need to send 10 gigabyte files around the world also need high-speed internet connections.

There’s only one problem: if the user you’re sending files to doesn’t also have a high-speed connection then the full benefits of connectivity are lost.

It’s something that held Chattanooga back in the early stages of its gigabit journey.

Jobs growth

“For the first five years they were like a Deepwater port,” said Ivereigh. “Sure you could get your ship and containers in there, but you couldn’t get it back.”

But the number of high-tech companies moving to unlikely Chattanooga made other cities sit up and take notice.

There have been estimates that the gigabit city move helped generate 2800 new jobs and $865.3 million in social benefits.

According to The Guardian, from 2009 to 2014 the amount of venture capital invested in the city went from zero to $50 million.

Once other cities started to join the gigabit game, the full potential of the connection was realised.

“You can [now] transfer files between cities like Amsterdam, Kansas City and Hyderabad,” said Ivereigh.

“So we’re actually joining the pack.

“We’re now better placed to do business outside of Australia than inside Australia.”

The presence of the gigabit connection in Launceston now means that the town of under 87,000 has the potential to join the global high-tech revolution as Australia’s representative.

Bigger than the mining boom

Like many places in Tasmania, Launceston has been crippled under the weight of high unemployment and the gradual shutdown of industry.

According to the latest ABS data, Launceston has an unemployment rate of just over nine percent. The national average is 5.8 percent.

While Launtel is starting small (30 customers), Ivereigh is talking big.

“This is going to be bigger than the mining boom, and…we need to be a part of it,” he said.

“It’s a big change of thinking for a place like Tasmania where we think of ourselves as having a bit of a basket case of an economy.

“The change of thinking is ‘s**t, we’re important now!’”

Ivereigh says his job has gone from being an engineer to becoming a seller of a grand vision – to turn Launceston into a high-tech hub on the back of the gigabit connection.

“I talk about infecting people with the gigabit virus, because once they start to think about it they think ‘we need to start getting behind this’ and then they start talking about it,” he said.

With a gigabit connection and the ability to connect to other gigabit cities around the world, Ivereigh sees the potential to lure new blood to the town.

“There are a lot of expats living on the mainland who remember Tassie as it was 30 years ago,” Ivereigh said.

“We’re trying to get people to understand that it’s not only about the job but about the lifestyle.

“For example, I’ve got a 55-acre property that I bought for half a million dollars. You wouldn’t even get a unit for that price in Melbourne.”

Ivereigh doesn’t know what sort of companies will move to set up in Launceston, and that’s part of the fun.

But he does know that the companies of today and the future will live and die by their connectivity and the ability to take their business global.

That’s why he’s taken the punt on putting a gigabit connection in the most unlikely of places.

“I expect more businesses to say ‘we’re over this high-priced real estate in Sydney and Melbourne’ and the most important thing about doing business around the world is connectivity.”