NBN corporate plan: 2010 vs. 2012

NBN Co has revised its roll-out targets and costs, and has also pushed out the date for the completion of the network. So, what else has changed?

NBN Co has revised its roll-out targets and pushed out the date for the completion of the construction of the National Broadband Network (NBN) from the initial forecasts it made back in 2010, so what has changed exactly?

The original plan released in December 2010 covers three years worth of the roll-out, until June 2013. The new corporate plan lists what was achieved in the time since then, and also projects where the NBN is expected to be by June 2016.

A number of factors have changed the roll-out schedule. The AU$11 billion Telstra agreement and associated regulatory approval that now allows NBN Co to access Telstra's pits and ducts was delayed from 30 June 2011 to 7 March 2012, meaning the start of the volume roll-out of the NBN was delayed. Prolonged negotiations over the construction of the network also meant a delay in starting the roll-out, and instead of there only being 14 points of interconnect for the network, the Australian Competition and Consumer Commission has increased that to 121.

NBN Co is now providing fibre to new housing developments over 100 lots. Occupancy and connection demands in new housing lots have been lower than expected, due to softness in the construction industry, the Queensland floods and because NBN Co transferred back 73,000 premises to Telstra that were originally included in the 2010 plan.

The 2010 plan did not account for customers on the interim satellite solution, or the fixed-wireless service coming online. In 2011, this ended up accounting for 165,000 of the 183,000 premises passed, and 200 of the 800 active connections.

Below is how the 2010 and 2012 plans compare for number of premises passed and number of active services.

Number of premises passed

2010 plan 2012 plan
 FY 2011  223,000  183,000
 FY 2012  273,000  213,000
 FY 2013  1,221,000  661,000
 FY 2014  N/A  1,681,000
 FY 2015  N/A  3,664,000
 FY 2016  N/A  5,532,000

Number of premises with active services

2010 plan 2012 plan
FY 2011 35,000 800
FY 2012 116,000 13,500
FY 2013 419,000 92,000
FY 2014 N/A 551,000
FY 2015 N/A 1,615,000
FY 2016 N/A 3,181,000

The fibre network will still end up covering 12.2 million premises by 2021, with 1 million covered by fixed wireless and satellite services. 8.5 million customers are expected to be using fibre services on the NBN by 2021, instead of 8.3 million as forecast in the 2010 plan. Telstra will now finish disconnecting people from the copper network by 2023 instead of 2022.

The network now covers a road distance of 148,000km, instead of 130,000km, and the fibre network is now 206,000km long, instead of 181,000km.

The forecasted rate of return has slightly increased from 7 per cent to 7.1 per cent. The total revenue until 2021 is going to decline slightly from AU$23.7 billion to AU$23.1 billion. Capital expenditure is going up 3.9 per cent from $35.7 billion, to $37.4 billion, and operating expenditure is increasing from AU$23.2 billion to AU$26.4 billion.