NBN Co hails FttN trial, proposes TPG tax

NBN Co has said that its 105Mbps download speed achieved in a fibre-to-the-node trial was based on a single test, and has suggested TPG should be taxed for its proposed fibre to the building plans.
Written by Josh Taylor, Contributor

NBN Co is cautiously welcoming the results of a trial of fibre-to-the-node services that delivered download speeds of 105Mbps, and upload speeds of 45Mbps up.

The first node was installed next to an existing Telstra pillar in Umina on the New South Wales Central Coast on March 12, and trials commenced on March 28. The copper line from the node to the shop front where a VDSL modem was installed was around 100 metres long, NBN Co said.

NBN Co's chief operating officer Greg Adcock told journalists today that the speed achieved on the fibre to the node connection was based off a single speed test and did not dictate a trend, but said it was a good start.

"The raw speed is just the straight down speed off a quick test, and we just wanted to put it out there. Clearly before it gets to an RSP there is some traffic management overhead to go in there," he said.

The copper line used in the trial was not brand new, either, Adcock said.

"The copper pair for the trial itself is just a standard copper pair that was in existence. It wasn't a new one, it was just the copper pair that pulled off the pillar that went to the premises where we ran the test," he said.

"I wouldn't say one test in any way dictates a trend, but it certainly was encouraging."

NBN Co has installed a number of nodes around Umina, and Epping in Melbourne as part of its fibre-to-the-node trial. According to NBN Co's product roadmap, NBN Co is planning on deploying 20 nodes in total delivering VDSL2 services to 400 premises. A trial with retail service providers is set to start at the beginning of May and run until the end of October.

"Once active, the next step will see NBN Co invite retail service providers to take part in a limited FttN end user trial in these locations. The aim will be to test the delivery and end user experience of high speed broadband via FttN to a small number of premises at each location," Adcock said.

NBN Co today reported an operating loss of AU$1.117 billion for the three quarters of this financial year ending March 31, 2014. In that time, NBN Co generated AU$69.8 million in revenue, with telecommunications revenue rising to AU$38.5 million.

Capital expenditure to the end of March is now at AU$4.9 billion, with operating expenditure at AU$2.4 billion.

As ZDNet reported earlier this week, NBN Co is well on track to meet its 357,000 brownfields premises passed target by the end of June this year, with 512,659 premises passed by the fixed and wireless networks as of the end of March. NBN Co has had an average run rate of over 6,000 premises for the combined brownfields and greenfields rollout, and 1,000 premises passed per week for the fixed wireless rollout in the quarter.

For the 166,642 users connected to the NBN, there was an average revenue per user of AU$37.55 per month for the quarter.

NBN Co's acting chief financial officer Robin Payne said this reflected a trend for customers to take up the 25Mbps down, 5Mbps up service on the fibre and fixed wireless, but he said the balance of orders for different speed tiers had remained relatively stable for the quarter.

He said 37 percent of new orders in the quarter were for the 12/1 service, 42 percent were for the 25/5 service, and 17 percent were for the 100/40 service.

In total, 39 percent of active users were on a 12/1 plan, while 34 percent were on the 25/5, 21 percent were on the 100/40 service.

Payne did not disclose the percentage for the 50/20 speed tier, but according to NBN Co's slides from the presentation, around 6 percent of users were on the 50/20 plan today.

NBN Co has now built out to 113 of the 121 points of interconnect, and 80 percent of the company's transit network has been built.

Despite the network rollout still progressing, NBN Co CEO Bill Morrow said more needed to be done.

"For instance, we are moving to a construction model that will see our delivery partners install lead-ins and connection boxes to the outside of a home as the fibre is being rolled out in the street. The aim is to increase the number of homes and businesses that are more easily able to connect to the NBN when it becomes available in a neighbourhood," he said.

"There is more to analyse, more to improve and much more industry collaboration needed but we are making progress as evidenced by the metrics we are reporting today."

TPG tax proposed

Morrow told journalists that in addition to NBN Co's decision to speed up roll out of fibre to the premises in CBD locations in response to TPG's plans to roll out fibre to 500,000 premises across lucrative, high return, metropolitan areas in Australia, NBN Co would also lobby the Michael Vertigan cost-benefit analysis panel to introduce a levy on TPG and other companies that want to compete against NBN Co on an infrastructure basis.

"We think that we need to consider: does the government impose a cross-subsidy component on the infrastructure competitors? So if for example, TPG is going into a certain area, they can do whatever cost model that they can come up with, but there's a levy, there's a subsidy... to partly offset these costs for getting a broadband connection to rural areas," he said.

"This is something we hope the Vertigan panel considers in its deliberations."

Morrow was reluctant to label the proposal as a tax, instead referring to it as a levy, or a cross-subsidy similar to universal service obligations.

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