2014 Australia - The National Broadband Network

It is now a year after the original plans for the NBN were abandoned and a new version was launched. So it is interesting to check how things balance out after that first year of NBN 2.0

While very little progress has been made on the new plans the good news is that the original planned rollout of the FttH has been gathering steam and is well and truly underway. Some fine-tuning has taken place and in general terms the rollout process is in better shape than before. With more and more countries rolling out FttH networks the knowledge base of the technology has increased, while at the same time the cost of deployment has decreased. Around the world FttH has become the norm in greenfield deployments. This has also led to a review of the possibility of including more FttH in NBN 2.0. These developments are extensively covered in the report.

The major difference between the original plans and NBN 2.0 is that at this stage the FttH plans have largely been abandoned; this technology will not cover much more than 20%-25% of all broadband connections in the country – the so-called lucky people. The remainder will be linked via a mixture of multi-technologies (MtM) of HFC and DSL-based networks. These are the existing coax and copper cables, mainly from Telstra.

The delays in rolling out NBN 2.0 clearly shows that to embark on MtM is easier said than done as it significantly increases the complexity of the technology. At the same time changing plans also means making sure that the regulatory environment will be altered to ensure that MtM can be made available on an open, wholesale-only basis.

The reality is that MtM largely depends on Telstra’s network and Telstra’s expertise, and the government totally depends on Telstra’s cooperation to deliver the plan. The problem that many in the market now see is that Telstra’s dominance is only increasing because of its important position in government policies. Even if it does lose some of its retail privileges the money it receives from the government makes it possible for the incumbent to basically do what it wants. Telstra’s prime position is covered in a separate chapter of this report.

In 2013 the government promised a quick delivery of its policies, but this is dragging on well into 2015. In the meantime Australia is falling further and further behind on the international ladder of providing citizens with good quality broadband. It is at the bottom of the OECD list and even on a larger international overview it sits somewhere around the 50^th position. It also severely hampers growth in the market as, apart from Telstra all other players are now staring to experience a period of stagnation. The health of the market depends on a rapid deployment of the NBN.

There is still hope that NBN Co will be able to find better and cheaper ways to deploy FttH than MtM, but the reality is that with the financial squeeze being experienced by NBN Co there is little chance that they will be able to upgrade the MtM to proper FttH any time soon. This will leave many Australians stuck on a potholed broadband network while the rest of the world (and other parts of Australia) have access to superhighways.

Data in this report is the latest available at the time of preparation and may not be for the current year