'Faster' NBN rollout slower than expected

Despite a shift away from the "slower" fibre-to-the-premises construction model, NBN Co has again reduced its forecast for the number of premises that will be connected to the National Broadband Network (NBN) in 2016.

In an announcement this morning, NBN Co released its rollout forecast for the next 18 months, stating that an additional 1.9 million premises over 400 cities will be connected to the NBN by the end of June 2016 as part of the new "flexible multi-technology approach" that will see some premises miss out on fibre to the premises and instead receive fibre to the node or an upgraded hybrid fibre-coaxial (HFC) service.

"We're committed to bringing fast broadband to all Australians as quickly as possible. The new multi-technology approach enables us to do just that. Over the past year, we have carried out successful trials of a range of new technologies, revised our build processes, and are renegotiating our partner agreements. As a result of this work, we are able to provide forecasts that reflect the next phase of our network build," NBN Co CEO Bill Morrow said in a statement.

"It is these forecasts that will enable our customers, the telephone, and internet service providers to be able to start planning the delivery of services over the NBN to these communities.

"Of course, the longer the forecast, the greater the likelihood that changes will occur. That's only to be expected in a project of this magnitude."

Including premises already passed, and the long-term satellite service, NBN Co estimates that 3.8 million homes will be able to connect to the NBN.

The forecast for fixed-line premises connected is significantly lower than that in the final corporate plan prepared by the former NBN Co board shortly before its dismissal by Communications Minister Malcolm Turnbull. According to the leaked 2013-16 corporate plan (PDF), NBN Co was set to pass approximately 2.7 million premises by fibre at the end of June 2016.

Those targets were significantly revised downwards by the new NBN Co board in the strategic review before the government officially adopted the "multi-technology mix" for the NBN.

It is also significantly lower than the promise that Turnbull took to the election of providing a minimum of 25Mbps to all premises by the end of the first term of the Abbott government. Under current projections, approximately 30 percent of premises will have access to the NBN by the time of the next election.

One major factor reducing the number of premises counted in NBN Co's current figures is the exclusion of the HFC networks owned by Telstra and Optus.

The HFC networks should add close to 3 million premises to this total, should NBN Co be able to obtain ownership of the networks. It is understood that NBN Co's deal with Optus is all but wrapped up, awaiting the finalisation of NBN Co's renegotiation with Telstra. On Radio National this morning, Bill Morrow said that he still believes the negotiations will be completed "this side of Christmas".

However, the deals will need to be approved by the Australian Competition and Consumer Commission (ACCC), which will likely mean that NBN Co will not be able to start a full-scale fibre-to-the-node and HFC rollout until mid-2015.

NBN Co said today that it would update its forecast every three months.

NBN Co has indicated that its product road map will see fibre-to-the-node services available to retailers in Q3 2015, while fibre-to-the-basement services will be available in Q1 2015.

NBN Co executives will tomorrow front the Senate Select Committee for the National Broadband Network for likely the last time in 2014.