Tensions with telcos and network gaps to challenge NBN Co in 2021

The national broadband network has sailed into the new year with a spring in its step, with the federal government declaring the $53 billion network is finally “built and fully operational”. But its management should be under no illusion as to how arduous 2021 is likely to be.

Having taken over a decade to hit its target of making 11.86 million premises ready to receive broadband services over the NBN, the management team in charge of the network needs to crack on with connecting the homes that were put in the too hard basket.

NBN Co CEO Stephen Rue and Minister for Communications, Cyber Safety and the Arts Paul Fletcher.
NBN Co CEO Stephen Rue and Minister for Communications, Cyber Safety and the Arts Paul Fletcher.Credit:Alex Ellinghausen

That number currently stands at around 35,000 and there’s also the issue of helping some 238,000 or so homes get the minimum 25 Mbps (megabits per second) speed that they are paying for but can’t receive. Most of these under-served homes are on fibre-to-the-node connections that rely on copper rather than fibre for services.

As with all things NBN, the numbers need to be put in context and the overall number of premises with no or poor services makes up just over 2 per cent of the total footprint of the network. But 2 per cent of 11 million is still a pretty large number, and those missing out on fast internet speeds, especially during a pandemic, won’t be shy in making a noise about it.


The declaration of completion from the federal government is a crucial first step in paving the path for the privatisation of the NBN.

But there will be far sterner tests ahead before we get anywhere close to that process. There will be a Productivity Commission inquiry, the findings of which will be vetted by a parliamentary joint committee, and until the NBN Co can deliver reliable baseline speeds, ideally 50 Mbps across the entire network, both fixed and wireless, the full potential of the project will remain unrealised.

Using a mix of technologies to connect the homes to the network may have helped NBN Co meet its flexible construction timetable, but it has now left gaps in terms of the service many homes can receive.

NBN Co has, in theory, a fix for this, with $3.5 billion earmarked to provide around 6 million households with the option of accessing ultra fast internet speeds, including providing fibre-to-the-home connections at no charge to those homes that sign up for high-speed plans.

However, the upgrade process won’t be all about the money and will rely on effectively co-ordinating the workforce available to NBN Co. Given the current contention between telcos and NBN Co over whose shoulders the burden for botched NBN connections rest, the upgrade process is likely to pose its own set of complications.

According to the telcos, there are still a high volume of faults and outages on the NBN side of the network, which leads to poor customer experience and, in turn, increases their cost to serve them.

Telstra, Optus and TPG also maintain they are paying NBN Co far too much for wholesale capacity. That’s despite the discounts and cuts offered by NBN Co, but as long as the CVC charge, which covers the amount of bandwidth telcos can make available to customers, remains in place, the telcos won’t stop agitating against it.

As a reseller of NBN services, the charge burns a hole in the profits of the big operators and even 5G mobile technology’s purported magic won’t be enough, at least in the short term, to staunch that bleeding.

NBN Co and the federal government are unlikely to relent on CVC, but expect the telcos to ramp up the pressure on that front in 2021.

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Source: Thanks smh.com