News National How much extra for the NBN? $11.5bn

How much extra for the NBN? $11.5bn

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A strategic review into the national broadband network (NBN) has recommended rolling out a mix of technologies, including fibre-to-the-premise, costing $11.5 billion more than the coalition’s original forecast.

The review of network builder NBN Co, released by the federal government on Thursday, estimates a total cost of $41 billion, rather than the $29.5 billion estimated by the coalition in April.

It forecasts that by 2019, speeds of up to 100 megabits per second (Mbps) will be available to more than two-thirds of Australian residents, and nine out of 10 Australians will have speeds exceeding 50 Mbps.

It also says the current plan set up under Labor will miss its 2021 target by three years, and cost $73 billion – up from $43 billion – to complete.

The review has recommended implementing a multi-technology approach.

This includes continuing to roll out fibre-to-the-premise (FTTP), or buildings, for 20 to 26 per cent of premises until 2018 to “maintain momentum”, mainly in high revenue potential areas such as business districts.

That’s well down from Labor’s 2021 aim to connect every home and business to FTTP, which can reach speeds of up to 1000 Mbps.

The slower fibre-to-the-node (FTTN), or boxes on street corners, model, which will rely on ageing copper wires, will be rolled out to 44 per cent to 50 per cent of premises under the review.

Hybrid fibre-coaxial (HFC) has been recommended to be deployed to 30 per cent of premises, with speeds of up to 100Mbps currently possible, as well as upgrades into the future.

Fixed wireless and satellite will be used outside the fixed-line footprint, which is estimated to serve six per cent of premises.

NBN Co will also explore a suggestion from the Tasmanian government to make greater use of aerial FTTP deployment through powerlines.

The review also states upgrade paths to FTTP, from FTTN, can take place at a lower cost provided it occurs five or more years into the future.

Federal Communications Minister Malcolm Turnbull says the monthly retail price to access the NBN will be cheaper if the recommendations are adopted as the project will cost less than Labor’s plan.

While the NBN will now cost more than the coalition originally expected, Mr Turnbull said the coalition remained committed to limiting its equity investment in NBN Co to $29.5 billion, with the excess cost to be made up through debt.

NBN Co chairman Dr Ziggy Switkowski said the strategic review looked to the future.

“Viable, economically attractive upgrade paths currently being trialled internationally are capable of providing speeds well beyond 100 Mbps and can be deployed as consumer demand increases over time,” he said.

Positive cash flow from NBN Co is estimated to emerge in 2022.

NBN Co carried out the strategic review with the assistance of three external advisers – the Boston Consulting Group, Deloitte and Korda Mentha.