Conroy reveals freefall in fibre-to-the-home costs

Communications Minister Stephen Conroy has revealed a bidding war that occurred between builders in a Melbourne greenfields estate over the cost of connecting new homes to an Opticomm fibre network.

Linked gallery: Photos: Realising Our Broadband Future Forum

Senator Conroy told journalists at the Realising our Broadband Future forum in Sydney that a builder in the Alamanda Estate at Point Cook “almost went out of business” after trying to charge home owners $3000 to connect their homes to the fibre.

He claimed the average cost of connections was $1200 a house - well below the industry average of $2000 to $3500 a house  charged by greenfields fibre builders.

“There’s a lot of colour and movement in claims [for fibre connection costs],” Conroy said.

“In [Alamanda] on the ground the average [connection fee] was $1200. Anyone who tried to charge more was quickly exposed and quickly had to drop their price back to what was the accepted market price.”

The admission opened the possibility that economies of scale created by the National Broadband Network might lower the price of residents in new housing estates trying to connect fibre to their homes.

That cost to the estate developer is often passed on to new home owners in the cost of buying a house-and-land in the estate.

It remains unclear under the NBN project who would foot the bill for connecting homes in existing areas to the NBN fibre.