Multi-technology mix NBN could now cost over AUD$50 billion

The company formerly known as NBN Co today announced that it now estimates that Australia's National Broadband Network will now cost between AUD$46 billion and AUD$56 billion. The new figure exceeds the current estimate of AUD$41 billion, which itself is double the AUD$20.4 billion the Coalition originally said it would spend on a multi-technology mix (MTM) National Broadband Network. 

The MTM approach to the National Broadband Network utilises fibre-to-the-premise (FTTP), fibre-to-the-node (FTTN), fire-to-the-building (FTTB), hybrid fibre-coaxial cable (HFC), fixed wireless and satellite technologies. According to NBN Co's 2016 corporate plan, the company expects that 20% of premises will be connected via FTTP, 38% via FTTN or FTTB, 34% via HFC, 5% via fixed wireless, and just 3% via Satellite. NBN Co plans to reach nine million homes by 2018, and to finish the rollout by 2020.

Despite the new, larger cost estimate, NBN Co says a National Broadband Network solely utilising FTTP technology – as originally proposed by Labor – would have been even more expensive and taken longer to build. A "high level analysis" performed by NBN Co management suggests an all-FTTP model would have cost between AUD$74 billion and AUD$84 billion, and could not be completed until 2026 at the earliest.

Labor originally costed its all-FTTP National Broadband Network at AUD$37.4 billion

The Government's funding for the NBN is capped at AUD$29.5 billion.  NBN Co will likely have to seek private investment to cover the gap.

In addition, NBN Co today detailed its achievements for the 2015 financial year, saying it has exceeded its targets.

"[NBN Co] has not only met its targets; it has exceeded them," said NBN Co CEO Bill Morrow. "The achievements of the past 12 months  give us confidence that we can continue to accelerate the build. This will help us to meet our goal of ensuring that every home and business in Australia can receive fast broadband by 2020 so we can spur the digital economy and close the digital divide."

Over the 12 months leading up to June 30, the NBN Co says it mas more than doubled the number of premises than can connect to the National Broadband Network, as well as the number of homes with an active connection to the network. 1.2 million premises can now connect to the National Broadband Network, and 486,000 homes and businesses are actively connected.

Leave a Reply