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Nationalised telecoms infrastructure in cost overrun down under
Monday 24 August 2015 10:00:32 by Andrew Ferguson

If there was ever a cautionary tale about what a nationalised UK Telco might turn out like, then look at Australia. The NBN project was meant originally to be a FTTH heavy project with fixed wireless for smaller towns and satellite to the outback, but this has been downgraded to a mainly FTTC roll-out and yet costs continue to rise and providers are facing increased costs as video on demand starts to take-off in Australia.

The demographics of Australia is vastly different to the UK, but once in the more urban areas where the NBN is planning a FTTC and FTTP mixture things are not that different. A major difference though that the NBN has acquired the Telstra network for something like $11 billion.

The big problem now is that while the public purse is limited to exposure of around $30 billion, the project cost keeps going up as more time is spent on the planning and with labour costs following the usual pattern of always rising any delays are not going to help. As things stand the project is looking at spending $49 billion, earlier estimates were $43 billion but this is still apparently $30 billion less than the original FTTH heavy project was likely to cost.

If everything goes to plan, the tech mix should be around 20% FTTP, 72% FTTC and the rest on fixed wireless or satellite (the project already has dedicated satellite capacity in the sky). This is for a total of some 7.6 million households (population 22.3 million).

Price wise on the NBN network plans it is a choice of a monthly plan with an extra 'casual use fee' or 24 month contract, with a range from $75 per month for 100GB allowance through to $115 for 1TB (plus $59 activation fee and $144 router, engineer installs are another $192) and the speed will vary depending on what technology is available in your area, i.e. plans appear to be no cheaper if you can only get ADSL2+ versus FTTC. Speed wise though if you do creep over your data plan your speeds are capped at 0.25 Mbps. The reason the costs are the same irrespective of connection speed is because the NBN charges providers based on the Mbps used.

BT Wholesale on its WBC network in the UK does have usage charging based around a 95th percentile, but with the massive Sky and TalkTalk backhaul networks there is plenty of options available. TalkTalk LLU network covers 95% of UK premises.

Usage is important as a HD film may be 3GB in size, but embrace UHD and this will rise to 15 to 20GB or maybe even more if its live streaming.

Update: Current Australian dollar to sterling conversion is 0.46, so $75 is £34.50.


Posted by themanstan about 1 year ago
Andrew, worthwhile putting in a AUS$ to GB£ conversion for one of the costs for benchmark purposes?
Posted by WWWombat about 1 year ago
Andrew, you mention 72% FTTC, but this can be broken down further into FTTC as we know it (FTTN over there), FTTB (using FTTdp or VDSL2) and HFC (cable broadband, as we know it). And the total is nearer 12m premises.

I think the intention used to be around 30% being HFC (cable broadband), about 30% using VDSL2+Vectoring (DSL broadband), and about 10% using FTTB (as a form of DSL broadband too).

MTM Scenario from Nov 2014:
Posted by andrew (Favicon staff member) about 1 year ago
But as I keep being told on twitter, only FTTH counts as real fibre.
Posted by WWWombat about 1 year ago
But the meat of the story is somewhat staggering. A $1.5bn loss for the year, while passing 1.2m premises ... and that is on target!

Peak funding of $49bn for the MTM solution ... which they think would become $74-84bn is they followed the original FTTP-for-92% plan.

Staggering numbers for a "small" country.
Posted by WWWombat about 1 year ago
Of course it does ... to the twitterati. To most everyone else, it doesn't really matter.

At least Australia do tend to call the different technologies by the right name, and had the foresight to name the company as NBN for Broadband, not NFN for fibre. Imagine the extra furore ...
Posted by unobroadband about 1 year ago
Why use Teltra's Retail cost? It is like giving the BT Retail price as the "standard" where there are other NBN providers offering a far better deal.
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