NBN Co rejects Coalition's NBN pricing

NBN Co rejects Coalition's NBN pricing

Summary: NBN Co CEO Mike Quigley has said he is confident that the National Broadband Network project can be delivered on time and on budget.

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TOPICS: NBN
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NBN Co CEO Mike Quigley has rejected a Coalition analysis that claims the current National Broadband Network (NBN) project will be delayed by five years and will cost up to AU$94 billion.

Last week, when the Coalition released its own fibre-to-the-node alternative NBN policy, Shadow Communications Minister Malcolm Turnbull said that the Coalition analysis of the current project estimated that in a certain scenario, the cost of the network could blow out to AU$94 billion and be delayed by five years.

Quigley today rejected that possibility, telling the joint parliamentary committee overseeing the NBN that he was confident that the project could be delivered on time by June 2021, and on budget with a capital expenditure of AU$37.4 billion.

"Personally, I'm more than happy with the progress NBN Co has made. It's in my view, reasonably satisfying that we've advanced to this point [...] given the changes we had to take on board, given the increase in scope," he said.

"We are confident that we can bring in the project in on time at that end date, and on budget."

Quigley said that in taking into account the delays in construction now, the company was not seeking to increase the peak rate of premises it will pass, but will instead just maintain that peak over a longer period of the construction in order to make up the loss.

NBN Co today provided the committee with a detailed breakdown of its costs (PDF), as well as the current uptake and data usage on the network.

The Coalition had estimated that the cost to pass each premises by fibre would be AU$3,400, but Quigley said today that the current cost per existing premises was now between AU$2,200 and AU$2,500. He said the cost had declined thanks to the shift to the build drop approach that pulls the fibre right up to the side of every premises without first seeking permission from the owner of that premises.

It was even cheaper for new housing premises, at AU$700 per premises.

As of the end of March, Quigley confirmed that 39 percent of users on the NBN were on the 12 megabits-per-second (Mbps)/1Mbps plan, 31 percent of users were on the 100Mbps/40Mbps plan, 24 percent were on the 25Mbps/5Mbps plan, 5 percent were on the 50Mbps/20Mbps plan, and 1 percent were on the 25Mbps/10Mbps plan.

The average download per month on the NBN was now sitting at 47GB per month, compared to the Australian average of 31GB per month.

The release of the new documents breaking down the cost of the project just before the committee convened was criticised by Turnbull on Friday, stating that they should have been provided earlier than the hearing.

Quigley said that the documents were only released when NBN Co could be confident of the details provided.

"Whenever we put numbers forward, we want to make sure we have some confidence in them," he said.

NBN Co is preparing a new corporate plan, which is planned to be submitted to government in May. Committee chair and regional Independent MP Rob Oakeshott has flagged that he would like NBN Co to create an alternative corporate plan that assesses the Coalition's alternative NBN.

Quigley has said that it would be possible for the company to undertake such a task, but he said the big question would remain over the quality of Telstra's copper network, which NBN Co had no information on.

"It very much depends on the quality of the copper in the ground. You really have to test it to work out how much remediation you have to do," he said.

"While inside the company we know a lot about VDSL technology including vectoring, what we don't know obviously what is the state of the copper network in Australia."

He said that it would need to be determined how much remediation would need to be done, and the cost of that remediation, and also who would pay for it.

NBN Co chief technology officer Gary McLaren confirmed that the company had also been assessing going fibre to the basement in multi-dwelling units, with a VDSL connection to premises from there. The company had no plans to switch to this policy at this stage, however, because it is not the government's policy but Quigley said that NBN Co does take policy alternatives to the government to assess if they are determined to be more cost effective. He said one big issue for fibre to the basement would be the supply of voice services into those apartments.

The hearing is scheduled to run until 3pm AEST today.

Topic: NBN

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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Talkback

11 comments
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  • Turtle fur

    New plans?

    Why?

    The old ones no good?

    No confidence in numbers?

    Please, this is touted as world leading infrastructure project. That it may be on paper.

    In reality it's just More spin and bulldust from labor and its puppet.
    Sultanabran
    • Really?

      After that whole article underlining that they are coming in under cost per premises and the rest of the positives, all you took away from the article was that NBNCO have spoken to the government about FTTB for MDU's.

      Talk about a one-eyed lialition supporter....
      GENIII
      • "NBN Co is preparing a new corporate plan..."

        Required because they've missed every deployment target. Impossible to believe the cost per premises passed has been lowered, given their performance it would require the most creative of accounting.

        FTTN for MDUs always the obvious solution, prevented from being used by a labor's political decision.
        Richard Flude
    • Oh really?

      There are no "new plans," just an update as variables in the project arise and are factored in. That's what happens with a large-scale project. Things change, and you need to change the plan to suit. Quigley is no puppet - he has a proven track record in this field, unlike most of the armchair critics and keyboard warriors who criticise him.

      What has been shown to be utter "bulldust and spin" is Turnbull's cost-per-premises estimate, which is vastly inflated over the real-world costings that the NBN project is encountering. His figures are at least 30% higher than NBN's actuals, which explains why his cost estimates are so pie in the sky. It's like he plucked them out of the air for political advantage.....who knew?

      One interesting figure is that almost one third of all NBN Fibre customers is connected at the highest speed available - that's much higher than NBNCo's predictions, and is therefore going to make NBNCo profitable more quickly than was expected.
      klaw81
      • What exactly has changed?

        Interesting also two-third would be happy with the speeds offered with FTTN and they'll get service much faster at a lower cost.

        Did NBNCo update take up rates?
        Richard Flude
        • corrections corrections

          To be accurate you would have had to say "two-thirds would be happy with FttN download speeds today," because that is the only comparison we have. They would not be happy with FttN upload speeds, or reliability, or costs. They would not be happy with FttN download speeds in a decade when the build would be finished.

          "they'll get service much faster"
          Only if you believe in Turnbull's delusions about how fast a network can be planned and negotiated, and how fast copper can be tested and repaired.

          "lower cost"
          Incorrect.
          "The revenues that the Coalition NBN will be able to generate will be substantially the same, certainly no less than, the revenues the Labor NBN would be able to generate"
          source: http://www.malcolmturnbull.com.au/homepage-issues/launch-of-coalition-broadband-policy-transcript-of-tony-abbott-and-malcolm-turnbull-press-conference/
          karl_w_w
    • Yes much like...

      The alternative, which has changed from a 2007 (cheaper and sooner) OPEL is better than "Labor’s FttN fraudband (add ironic LOL)", to a $7B broadband plan, to wireless is the future we don’t need a $50B NBN, to fraudband FttN, back to wireless is the future, back to fraudband FttN, yes we have a policy, no we don’t have a policy, fraudband FttN is the way to go, we don’t need a $50B NBN (we can do it for a third of the price) but I agree with AJ wireless is the future, here is our FttN policy we had, didn’t have, now have... and look, exactly as I said it will be one third of the price of the current $94B NBN at $30B.

      FFS :/
      RS-ef540
  • re sultanabran

    Hi Sultanabran

    mind sharing what you do for a living? I'd really like to understand why if the NBN has various plans that this means no confidence in the numbers and that in turn its spin and bulldust?

    Secondly would you vote for the liberals plan and be as equally disappointed if the organisation charged with delivering it had alternate plans?

    Would you just vote for it simply because its liberal as opposed to a labour idea?
    chugs@...
    • Isn't it obvious?

      "mind sharing what you do for a living?"
      Liberal stooge.
      Pilfer-52cec
      • He's...

        Probably the CEO of (I'm a CIO) Dicky Fluddy's quaint little car counting company... he certainly has the backward intellect and red necked bigotry for it ;)
        RS-ef540
  • Copper network for FTTN? State of decay!

    "It very much depends on the quality of the copper in the ground. You really have to test it to work out how much remediation you have to do," he said."

    I keep seeing all these comments about how FTTN depends on state of the network and (elsewhere) that Telstra has the answers...

    Before I cancelled my landline and spent hundreds on a km wireless link to a working line/adsl solution I went through the wringer several times with Telstra.
    Responses from a Telstra resolution centre went along the lines of... "We don't know the state of the network in your area, wait 12mths for a scheduled database update" "There were problems with that update, still doesn't show the state of network in your area, another 6mths"....
    Around the point they informed the department I was dealing with that they had upgraded my line to be ADSL compatible... (without touching the RAM8 pair gain pit out front =30k dialup). Supposedly there was a resultant chewing out of the liars internally.
    They then progressed to apparently connecting ADSL to my number...and my number to someone else's house, disconnecting that house and myself in the process... truly competence in action, lets get them to help implement FTTN on their own copper. That was the point I realised they hadn't even a HINT of a clue about their own network, cancelled the application and sorted out wireless from another property. Additionally 6mths later, after 5 repeated faults with a non working phone, I cancelled the landline altogether (wasn't aware of USO legislation, and I am not going to pay $300 to reconnect and fight them for another 18mths, my losses from non functional telecommunication were substantial enough already)

    Either Telstra has no clue about its own network, or has a policy of delay, annoy, obfuscate until they go away.

    Would you buy the copper network from them, and accept responsibility for the connection quality?
    Will Malcolm.... PERSONALLY GUARANTEE the quality of the connections, the speeds obtained... at risk of his parlimentary pension? How about a Statuatory Declaration with commensurate risks of a 6mth gaol term?
    Wouldn't it be nice to link parlimentary retirement benefits to performance while in office... but what politician would ever move legislation along those lines.
    Taylor Greu