NBN exceeds FY16 activation targets

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NBN exceeds FY16 activation targets

But telco economists remain wary.

The national broadband builder is tracking well ahead of its service activation targets, seemingly defying concerns that a growing number of mobile-only households will undermine its business plan.

An NBN spokesman told iTnews that the activation rate across the network reached 45.4 percent by mid-December. Services to around 736,000 of the roughly 1.6 million homes ready to be served were activated by the end of December 2015.

According to NBN’s latest corporate plan the network builder had been chasing a network activation target of 38.5 percent by the end of the current financial year.

However, NBN still has a long way to go. It is pursuing an activation target of 4.4 million premises by the end of the 2018 financial year and 8 million – about two thirds of its expected network footprint – by 2020.

But the predicted growth of mobile services could stymie this latest spate of fast take-up.

Telecommunications economist and vocal NBN critic, John de Ridder, said NBN would struggle to maintain its current activation pace, as mobile broadband services are becoming increasingly affordable alternatives to fixed line broadband.

De Ridder cited the long delay in reaching a decision to build the network - since Telstra first offered the Howard government to rollout the FTTN for around $4.9 billion in 2005 - as one of the key reasons mobiles have become a bigger threat to the creation of a national broadband wholesaler.

“It’s a different proposition that we’re looking at and mobile is not very expensive now and it’s getting cheaper all the time,” de Ridder said.

His comments echo those of fellow telecommunications and media consultant, iMediate principal Robert James, at a telecommunications conference in Sydney late last year.

James said that wireless and fixed technologies were on a trajectory to compete with each other more closely. The technologies, which were once complementary, were increasingly encroaching on each other’s ground he said.

He pointed to mobile broadband packages offering 12Mbps service with monthly download quotas of 50GB being offered at prices comparable to fixed line broadband. Conversely, last mile wi-fi access was giving fixed line broadband a run at parts of the market traditionally dominated by dedicated mobile network operators.

He had a specific warning for the national broadband network builder.

“My suspicion is that the high adoption of NBN in the latest corporate plan may be challenging,” James said before warning of a “significant shortfall of revenue” for NBN.

As a take-up constraint, NBN’s activation rate model assumes that around 15 percent of households will be mobile-only and a further 8.5 percent are vacant premises.

De Ridder said that the Australian Bureau of Statistics (ABS) held statistics on the number of households opting for mobile-only connectivity. However, he said, it wasn’t clear whether the Department of Communications’ Bureau of Communication Research (BCR) had consulted these figures.

The BCR’s most recent leading indicators research paper, released last November, said that fixed line networks dominated growth in the volume of Australian download traffic.

“When comparing the volume of data downloaded across fixed line against mobile wireless for the period 2009 to 2015, the proportion of fixed line grew eight percentage points, from 89 percent to an almost saturated 97 percent,” the report’s author’s wrote.

The report did not cite the ABS’s statistics on how many households were opting for mobile only connectivity.

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