Developers think NBN fibre is free: Opticomm

Opticomm CEO Paul Cross has said that developers mistakenly believe that the NBN Co is offering to roll out fibre to new housing developments for "free", not taking into account the costs of digging pits for the fibre.

As part of the National Broadband Network (NBN) roll-out, NBN Co will provide fibre to new housing developments with over 100 lots, as long as the developer builds the duct and pipes to NBN Co specifications.

NBN Co has been inundated with applications from housing developers seeking to get the National Broadband Network (NBN) fibre rolled out to their greenfield sites across the country. As of May, this year, NBN Co CEO Mike Quigley told a Budget Estimates hearing that NBN Co had received about 2500 different applications from developers, comprising 130,000 premises in total. NBN Co has signed up Visionstream and Service Stream to cope with the demand.

NBN Co will not disclose the actual amount per premise, but CEO Mike Quigley has previously said it is well below the $3000 per-premise that Opticomm claims.

Speaking at the launch of the new Opticomm fibre network in Drouin, Victoria, CEO Paul Cross said that his cost per premise to developers was AU$1500. He said that, while he had picked up a bit of work from developers, some believed that NBN Co's offering was free.

"There is a belief, I think, within the development community, that the NBN is a free network. Obviously, we've shown there are significant costs of rolling out this free network, and that the private sector can compete competitively in that area," he said, adding that a number of the applications he was getting now are from developers that are fed up with waiting for NBN Co.

"We've had a number of developers who have previously looked at going with the NBN, and have now changed their minds and have come back to private providers, because they can guarantee a date that they will be online and they can guarantee the services that will be provided," he said.

Cross said that he believed he was able to keep costs lower than NBN Co through the design specifications for the fibre roll-out.

"We are far more in tune, I think, of was is required in the estates. We've spent a long time in the planning for this; we're not working towards a design that NBN [Co] are using, which we believe is cost prohibitive. So we've selected more efficient ways of delivering the network."

But Cross admitted that bringing in backhaul links to the new housing site was an additional cost on the project. Where NBN Co rolls out its own backhaul, Opticomm leases from Optus.

"The nearest back hall was over 5km away for us, so we've had to bring a 5km lead-in fibre into this estate."

Shadow Communications Minister Malcolm Turnbull was also at the launch of the fibre network.

Turnbull said that NBN Co was imposing additional costs on developers through the pit and pipe, while telling them that the fibre was free.

"[Developers] say they have no choice; they're obliged to go for the NBN and of course, they're told that NBN [Co] will then do the installation for free to the developer — obviously not free for the taxpayer — but the developer's got to put in the pit and pipe. But the pit and pipe is a very expensive part of the equation, in and of itself, and of course, the way NBN [Co] specifies it is very expensive."