Few users go through with expensive NBN tech switches

NBN Co has taken in $225,000 in application fees from customers applying to switch their homes to a better access technology, but only one in ten users is committing to upgrade once a quote is received.

The conversion rate is contained in a series of documents published this week that provides a far more detailed view of NBN Co’s technology choice program than was provided at senate estimates last week.

It shows most users are baulking at the size of the quotes to upgrade provided by NBN Co.

The highest instance of this was a quote of $61,600 to move from fibre-to-the-node (FTTN) to fibre-to-the-premises (FTTP). The applicant declined to proceed.

As at March 23, NBN Co indicated it had received 221 applications for individual premises switches. It did not say what access technology most wanted to move from and to.

The company said it had made $225,305 in application fees from the 221 home or business owners. The cost to apply is between $600 and $1000, but the total $225,305 figure shows users are paying around the higher amount.

Of the 221 applications received, only 113 proceeded to receiving a quote from NBN Co, and of those, just 30 went through with construction by March 23, NBN Co said.

At that rate, only 13.5 percent of those that apply for an upgrade actually end up with one.

It is likely there has been some change in those figures between March 23 and now.

NBN Co CEO Bill Morrow told an estimates hearing last week that 54 applicants were moving from fibre-to-the-node (FTTN) to fibre-to-the-premises (FTTP) connections.

At those rates, up to 25 percent of applicants are seeing their switches through to construction, although it is unclear how many more applications have been received over April and May.

NSW residents are by far the most likely to try to avail themselves of technology choice: 122 have applied, and 67 have moved through to quote.

The next most popular states for upgrades are Queensland and Western Australia; the other states and territories have numbers typically in the single digits.

Overall revenue from the technology choice program is growing. At November 7 last year, NBN Co had earned $356,236 from individual premises switches; that amount included all fees from application through to build.

Around five months later, the company has booked revenues of $596,895 for individual premises switches.

It had build revenue as at March 23 of $371,590. However, this is inflated by one project where a user upgraded from fixed wireless to FTTP at a cost of $157,126.

That means Bill Morrow’s assertions at estimates last week that the costs normally ranged from “sub-$1000 to tens of thousands of dollars” are broadly accurate.

The average cost per premises, based on these new figures, is around $7395.

NBN Co is likely to have made more from technology choice in total, as it also offers an option for area switches. The last revenue reported for that was $297,804 in November last year.

Last year, NBN Co said that as of November 7 it had only 15 individual premises switches that had progressed to construction.

It has now revealed where they are in the rollout.

The six NSW-based premises come from Armidale, Picton and Boambee; Queensland’s three premises are in Beaconsfield, Bundaberg and Bundaberg North; and Western Australia’s three premises are in Dayton, Pinjarra and Meru.

Of the others, one each progressed in Victoria (Bacchus Marsh), South Australia (North Brighton) and Tasmania (Deloraine).

It is possible a larger number of NBN users are wanting to avail themselves of the program. However, under NBN rules, they must wait until NBN Co has been through their suburb and declared it ready for service before an upgrade can be applied for.