Turnbull promises full per-premises cost of fibre NBN

Communications Minister Malcolm Turnbull has said that NBN Co will soon release an audited historical cost per premises passed for the fibre-to-the-home network to show the actual cost of the network rollout up until the multi-technology mix switch.

Australian Communications Minister Malcolm Turnbull has promised to release an internal review conducted by NBN Co into the cost per premises for fibre to the premises (FttP) under the previous government, in what will be the seventh review conducted into the operation of the National Broadband Network (NBN) project under the former Labor government,

When Turnbull announced the Coalition's broadband policy in April 2013, he had estimated that the cost to pass each premises by fibre would be AU$3,400. NBN Co at the time rejected this, stating that the cost per premises would be between AU$2,200 and AU$2,500.

The Strategic Review conducted into the NBN late last year, after the election of the Coalition government and a change in the NBN Co board, stated that the cost per premises for the fibre network, including the connection, was AU$4,097.

However, internal documentation of "Finance Project Fox", leaked to ZDNet, revealed that NBN Co had begun implementing new rollout techniques developed under the former management that had been bringing down the cost of labour in installing fibre to the premises, with costs as low as AU$1,034 per premises in some locations.

Since then, however, NBN Co has discontinued the fibre-to-the-premises rollout, instead adopting a "multi-technology mix" approach, which will see the vast majority of Australian premises covered by either fibre to the node, fibre to the basement, or the existing hybrid fibre-coaxial (HFC) networks.

In responding to criticism on Monday that the cost of the fibre rollout is in fact coming down, Turnbull said the claims that the cost per premises is coming down to around AU$1,200 had been "plucked from thin air", and said NBN Co would provide more detail on the exact cost of fibre to the premises soon.

"NBN Co is currently working on detailed historical cost-per-premise numbers, which will be externally audited and released in due course," he said in a blog post.

This historical figure would likely be inflated from the cost of the full fibre-to-the-premises network had it been continued, because it would include a higher proportion of premises when the network began construction. This was significantly more expensive than the cost per premises when Turnbull was elected last year.

Turnbull said the multi-technology mix (MTM) NBN is still the best option.

"The Vertigan panel found the MTM NBN was the most future-proof strategy for delivering universal access to high-speed broadband because it preserves the option of upgrading to FttP at a later date if this is justified by demand. In contrast, FttP locks in high and irreversible costs, reducing optionality and exposing consumers and taxpayers to vastly more risk," he said.

"That is why the multi-technology approach being taken today by NBN Co is consistent with best global telco practice."

It comes as NBN Co and Telstra are finalising a renegotiated deal that will allow NBN Co to utilise Telstra's legacy copper network and HFC network for the MTM.

Speaking before the Senate Select Committee on the National Broadband Network on Friday, NBN Co's chief financial officer Stephen Rue reiterated previous statements from the company that the deal will be finished "before Christmas".

He declined to confirm whether former Communications Minister Stephen Conroy's prediction of a December 14 announcement was accurate.

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