NBN clocks up more than AU$44m in new copper

NBN's actual spend on replacing copper between the node and pillar has been AU$30 million more so far than the cost estimated in October.

While the National Broadband Network (NBN) company had originally said it would be spending AU$14 million on purchasing 1,800 kilometres of copper to last the company five months, it has now revealed that actual spend reached AU$44.2 million as of March 10.

Citing commercial in confidence due to continuing negotiations, NBN could not provide any extra detail on volumes and costs of copper.

NBN had in October revealed that while copper lines between the node and the home will not need to be replaced, the company would need to add or replace copper between the node and the pillar where necessary in rolling out its fibre-to-the-node (FttN) network.

"We have to put new copper in to run to the pillar that serves all of our homes from our node to that pillar. And that could range in distance between right next to each other ... it is a short section, but it is new copper that has to go in the ground that doesn't exist today," NBN CEO Bill Morrow told Senate Estimates at the time.

According to Morrow, copper has to be used rather than fibre-optic cable in certain cases depending on the distances being covered. He added that defective cabling could also be replaced, with more copper also added where there is not enough to service homes.

"The other area to where we could be putting copper ... is that if there are defective joints that are out there that have a trouble rate that's too high, we'll need to go ahead and make that investment to replace that joint as it stands," the chief executive said.

"And then in the other case that I mentioned, if it turns out that there's not enough pairs going down the street to be able to serve all the homes that are there, then we may actually have to add pairs in that path to be able to get to each one of the homes."

Morrow's comments came just a week after claims made by NBN that it has not had to replace any of the legacy copper between node and home in installing its FttN network, with end users able to achieve high speeds while relying on existing infrastructure.

This was followed in December by a leaked internal NBN document revealing that the cost to replace or repair the legacy copper network will amount to AU$641 million.

"State of copper network considerably worse than expected, leading to extensive work beyond the node," the document dated February 26, 2015, said.

NBN ranked this risk as "almost certain", with "major" consequences.

"Decision to minimise remediation during build could reduce speeds available, create additional burden on connect, and hamper timely migration."

This figure is a significant increase from the AU$90.4 million total estimated in the December 2013 Strategic Review.

In December, NBN also contracted Telstra for AU$80 million in first-year revenue to repair faults on the copper, FttN, fibre-to-the-premises, fibre-to-the-basement, and hybrid fibre-coaxial networks.

In response to another Senate Estimates Question on Notice on Monday morning, NBN also revealed that professional splitter installation costs are capped at AU$160 when the installation takes place immediately. This covers AU$75 per hour for two hours, plus materials costing AU$10. However, when the splitter installation occurs at a later stage, the price cap increases to AU$235, to include the additional truck roll and an extra hour of labour.

NBN noted, however, that the cost of materials and time needed will vary for each premises.

On Monday, NBN announced that it has switched on several more towers in Tasmania, with 31,327 premises in the state able to access NBN fixed-wireless services. More than 100 fixed-wireless towers are now present within Tasmania, with the company planning to add more.

NBN has also released a research report conducted by the University of Melbourne, claiming that upon the NBN's completion, small and medium-sized businesses will contribute an extra AU$4 billion each year to the Australian GDP.

"Australian businesses are adaptable and resilient -- we readily embrace new ideas, new technologies, and new ways of working; access to the NBN network will open up opportunities for small business owners in our growing digital services-driven economy," said KPMG demographer Bernard Salt, who last month glossed over a previous doubling in the Newcastle unemployment rate when releasing data on jobs in the region.

"Whether you're an online craft business able to source and sell products more efficiently, or a tradie now able to process payments on the go, ecommerce will allow Australian businesses to access new markets, no matter where they operate."

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