NBN users opt for 100Mbps

NBN users opt for 100Mbps

Summary: Customers are picking the top fibre plan that is available on the National Broadband Network (NBN), more than any other plan, CEO Mike Quigley has revealed.

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TOPICS: NBN, Broadband, Telcos
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Customers are picking the top fibre plan that is available on the National Broadband Network (NBN), more than any other plan, CEO Mike Quigley has revealed.

Quigley told a Budget Estimates hearing last night that, of the approximately 3500 customers with active fibre services on the NBN, the 100Mbps down and 40Mbps up plan had proved to be the most popular, so far.

"Overall, 37 per cent of active services on our fibre network have been on the fastest speed tier, which is 100Mbps down and 40Mbps up. Only 18 per cent of the active services on our fibre network are on the entry level speed tier of 12Mbps down and 1Mbps up."

Quigley revealed that 10 per cent of customers were on the 50Mbps plan, and 35 per cent were on the 25Mbps plan. Although NBN Co is far behind the 10,000 customers it had expected to have services active for by 30 June in its original corporate plan, the uptake of the higher tiered plans is much higher than was expected.

NBN Co had previously projected that in 2012, some 52 per cent of active services would be on the entry level tier, with approximately 17 per cent on the 25Mbps plan, 23 per cent take up of 50Mbps plans and only an 8 per cent take up of the top tier 100Mbps plans.

Excluding NBN Co's decision to waive its connectivity virtual circuit (CVC) costs in the initial stages of the roll-out, NBN Co's average revenue per user (ARPU) will stand to be much higher, than initially forecast.

Quigley boasted that the take up of the highest plan was again higher in April, making up 50 per cent of all services activated in April, but he said that the company was expecting this take up to eventually level out across the plans, as all fixed line customers shift from the copper access network to the fibre.

"We expect to see that ratio shifting around a bit," he said.

Across fibre, fixed-wireless and the interim satellite, NBN Co has a total of 11,000 active services, although, it is still in the early trial phase for the fixed-wireless long term evolution (LTE) technology and currently has just 52 trial services.

To take into account the delay in signing the $11 billion agreement with Telstra, and a number of other factors that have impacted on the roll-out, NBN Co has been revising its corporate plan and will submit this new plan to the government by the end of this month.

Quigley said that one of the latest speed bumps to hit NBN Co, was problems with the address data provided by geospatial information company PSMA.

"One of the difficulties we're dealing with now is the accuracy of address files. When you consider [that] we're tasked with building a broadband network to serve all premises, it is understandable that we need highly accurate data on where every premise is, across the nation. This impacts almost every aspect of what we do. From planning and designing the network, to building it and, ultimately, operating it," he said.

"When we try to use the data, there are a number of inconsistencies in it for our use. It's obviously a very useful data set, but it isn't quite what we need to do this job. We're finding that many addresses have been duplicated, are incorrect or are missing. We have cases where many addresses are assigned to a single point, often in the centre of a street. This is particularly an issue [for] multi-dwelling units."

He said that anywhere up to 30 per cent of the data given to NBN Co has been inaccurate, and they are setting about correcting the data by having contractors walk down every street in a fibre-serving area.

"This is time consuming, costly and, itself, prone to error," he said. "That's just a reality of the complexity of dealing with a database that is trying to capture every address in the nation."

Quigley indicated that the completion date of the network roll-out may be pushed back past 2020, but he did not reveal what the new completion date would be. Communications Minister Stephen Conroy also indicated that the initial estimation of the cost of the network ($35.9 billion) would be pushed up slightly by the $800 million Optus deal. This deal will migrate hybrid-fibre coaxial customers onto the NBN, but he said the increase would be marginal and will allow NBN Co to speed up the roll-out.

To promote the three-year roll-out plan, NBN Co allocated $8.2 million to spend on advertising. To date, the company has spent a total of $3.66 million, including funding for live-read ads on Macquarie Radio's conservative flagship station 2GB. Two of the station's hosts — who have been notoriously opposed to the NBN — Ray Hadley and Andrew Moore ad-libbed around the advertorials, which NBN Co quickly withdrew from the station.

NBN Co's chief communications officer Kieran Cooney said that Hadley and Moore were the only two, of the 26 hosts on Macquarie Radio, who did not read the ads clean. Macquarie Radio apologised for the incident and offered an undisclosed amount in compensation to NBN Co, which the company accepted.

Topics: NBN, Broadband, Telcos

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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83 comments
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  • Where's Mathew whats-his-face complaining about how the secret nasty NBNCo plan is all about "forcing" people onto higher ARPU? Sounds like people are making their own rational choice to do that anyway...
    Gwyntaglaw
    • You don't need Mathew Gwyn, you have the other usual suspects rolling in with their FUD, like clockwork.

      Of course these two perpetually disproved sceptics would know better than Quigley?
      Beta-9f71a
      • Well, indeed Beta; indeed!

        Of course, the response to actual favourable data about the NBN is the same everywhere - out come the concern trolls.

        Once again, Mike Quigley showed himself to be head and shoulders above most of his interlocutors. I appreciate his feistiness at responding to FUD with fact. He's declared that he is more than willing to dust it up if falsehoods are being dished about. Good for him.
        Gwyntaglaw
      • yep don't worry, I'm sure the anti-NBN zealots will find some other ridiculous line to fill the void. I imagine it'll be "oh but these are just early adopters, they don’t count" however notice how they ignore this logic when they want to deride the early take up totals. It's all very convenient for them when they want.

        So come on guys, give us a prediction of your own. No really, I insist. How many will be on the various speed plans one year from now? That should be enough time to "weed out" the "early adopters".

        As for MM he's been well and truly humiliated again but that’s what you get for clinging to a few conservative graphs in a corporate plan rather than come up with a logical prediction about what will actually happen yourself and with that it seems I was right YET again. Have I ever been wrong? NBNco should employ me.

        http://delimiter.com.au/2012/05/14/is-abbott-consciously-lying-on-nbn-costs/#comment-414835
        Hubert Cumberdale
        • HC the critics said the NBN wouldn't make a cent (yes, yes here comes the, it's still in debt arguments - we know what you meant and so do you) but regardless, from the LOL files, seems NBNCo have even made money from 2GB... that's gold.
          Beta-9f71a
        • HC- i did offer you a timeframe (june next year) and a roll out figure, as i too agree that current numbers aren't what was originally present but were also delivered under estranged conditions and so not an indicator of overall progress... Unfortunately you choose to ignore any such comments that actually lock you into your word.
          AWY-7dfd5
          • Point out the article and the comment. I ignored nothing, if you posted it 4 days later like you did in this article I simply may not have seen it.

            What has it got to do with my word though? You must be confused. I'm asking for YOUR predictions. YOU have to "lock in" a prediction. Not me, my predictions and NBNcos are well known already... mine have turned out to be true btw.
            Hubert Cumberdale
      • Considering that Quigley wrote the corporate plan based on a number of studies one would expect him and the plan to know best.
        mathew42-bc1ae
        • Look what you did Gwyn...LOL.

          Yes, but as you have been told umpteen times Mathew (whenever you sprout the same old repetitive lines about the Corporate Plan) such figures are estimated conservatively, so as to avoid egg/face and for projects (all not just the NBN) to appear better than they anticipated.

          It is common sense and common practice in almost every businesses estimations (oh apart from Facebook shares, maybe ;-)
          Beta-9f71a
        • That's right. Quigley DOES know best.

          So when Quigley presents a plan to the shareholders (us) and says "this is our worst case scenario" and we STILL expect to make money so the NBN can go ahead and still be successful what do you say?

          Then what do you say when the numbers come in which are not a "worst case scenario"? Do you object and say "Well I don’t care what Quigley says now, I still think the worst case scenario will turn out to be true just because" or do you say "Well I was wrong, looks like the NBN will be even more successful than I thought, that's great!"?

          Seriously stop embarrassing yourself. Show a bit of decorum and have the guts to admit you were wrong.
          Hubert Cumberdale
  • Couple of things:

    Firstly the most important one: "We expect to see that ratio shifting around a bit,"- well says it all almost. Basically an acknowledgement that of the (is it the 3,500 or 11,000 figure used here) connections, they won't be representative of the approximately 10 million (i may be off with this figure a little) households...

    Secondly and also important is the fact from the sounds of this the figures include those who had the CVC charges waived. Rather important fact considering the waiver applies (and this is according to another ZDnet article from August last year) to those connected at less than 150 mbps where less than 30,000 premises are passed. So basically everyone if i'm not mistaken. Seeing as this charge is levelled on speeds $20 per 1 mbps speed, this would be the charge with the greatest direct effect on speed uptakes of different brackets.

    So it'd be nice if this rosy picture were true however there's too many variables compared to a nationwide roll-out for this information to be very meaningful. That said i do hope their take-up rates of higher speed plans does eventuate from the perspective that it increases the likelihood of it achieving it's economic goals (for NBN Co).
    AWY-7dfd5
    • Another way of saying that is "of the 3,500-11,000 [votes], they won't be representative of the approximately 10 million... households". It's statistical sampling - the basis of all opinion polls, and much else beside. And despite the claims that 1000-2000 people's voting preferences can't POSSIBLY say anything about the voting intentions of millions of eligible voters, the reliable conclusion is that they CAN and DO. There is a margin of error, which statisticians understand and build in; but statistical sampling really does work.

      The real question, then, is whether the sampling methodology produces meaningful results. If, say, we were talking about an entirely self-selected sample (say, those people who bought a new iPad on its first day of release), that would be less sound. But in the case of NBN connections, what we have is groups of people who are selected in a range of first release sites - varied in their socio-economic makeup, but not self-selected across the population.

      A plausible argument over time is that the early adopters in an NBN release area will skew to the higher speeds; and that the late adopters will eventually sign on mostly for entry-level speeds. But where you have the greatest takeup (around 40% in Willunga, so far?) you clearly have more than early adopters in play. More data is needed, but on the basis of numbers so far, the take up rates cannot be explained by enthusiastic early adopters only.
      Gwyntaglaw
      • Do you have a reference for the 40% in Willunga? The only public figures I've seen are 29% for Willunga and 26% for Kiama.

        It would certainly be good news for NBNCo if take-up had improved to 40%, more than halfway to the target of 70% (page 116 of NBNCo Corporate Plan).
        mathew42-bc1ae
      • Difference between a poll and the NBN figures. A poll is not accurate. They can be 10-20% difference in outcomes compared to polls and that's in a situation of two options: Coalition or Labor. NBN is more options, less geographic spread and ultimately more statistically inaccurate. I don't know a lot of people (aside from media personalities) who put a lot of faith on opinion polls anyways. It also ignores that even Quigley knows it's too inaccurate, yet apparently you like to ignore his words as well when they don't suit.

        I see you haven't even mentioned the CVC charges? Is there fault with that argument too??
        AWY-7dfd5
    • You don't appear to understand what the CVC charge is. The CVC is a charge that the ISP pays and is waived while there's too few people connected to each POI. Whether the CVC is charged or not does not affect the amount the end users pay. It is so ISP's can supply a service to a POI that doesn't have many customers attached yet and still make a profit. Your argument is therefore completely incorrect and the sample is therefore representative.
      OxleyDave
      • In essence the waiver of charges by NBN appears to be a subsidy to smaller or more remote areas. Idea! Setup a number of smaller service providers keep the number of customers below the magic number and wait for the cash to roll in.
        Knowledge Expert
      • Hi Oxley,

        I think you've misunderstood my argument. I understand what the CVC charge is, and that it applies to the end user in cases where there is sufficient density (since the August last year change of policy). My point was that no current site of the NBN has sufficient density to be charged this fee and that later on, once the first release sites and indeed later sites pass this density requirement they will be charged the CVC fee.

        My point actually revolved around the fact that as you mentioned the CVC charged IS passed onto consumers and that this would ultimately affect the purchasing decision of the consumers (at least a portion). Therefore my point remains highly valid as you and i have not disagreed on anything. I'm just stating that once density is achieved and the charge applied, the consumers would opt for the currently free 100 mbps service less when they're charged more for it.
        AWY-7dfd5
  • Agree AWY

    Early days but the take-up rate for the fastest speed tier needs to accelerate to justify the huge Cap-ex.
    Vasso Massonic
    • "take up of the highest plan was again higher in April, making up 50 per cent of all services activated in April"
      Abel Adamski
      • The take up figures are all a bit meaningless until NBN hits the big population centres.
        Knowledge Expert