NBN Co could miss revised June fibre targets

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NBN Co could miss revised June fibre targets
Precarious: NBN Co leaves little margin for slippage in its pursuit of June rollout targets.

Analysis: Cutting it fine in the race to the line.

NBN Co is facing the very real possibility of missing its revised June fibre rollout targets for built-up areas by as little as a couple of thousand premises, the latest rollout analysis by iTnews reveals.

The much-anticipated June update to NBN Co's Ready For Service spreadsheet, quietly published yesterday, places NBN Co in far shakier territory than just a month ago.

Buoyant rollout predictions by NBN Co last month had it on course to pass between 171,836 and 185,808 brownfields premises, eclipsing the targeted 155K-175K range.

This was predicated on an overly ambitious rollout program for the month of June, which the company will no longer meet.

Premises passed in brownfields areas between April 1 and June 30 is now expected to come in at 88,653 — a 20,698 reduction in just four weeks.

The majority of the reduction is due to works previously slated for June being pushed back to July.

This substantially erodes the 'padding' that NBN Co had previously accumulated in its rollout figures.

While the padding it did have somewhat cushioned it from an overly negative impact, there is no more where that came from.

In short, NBN Co can't afford any further slippages for June. It is now firmly locked in a race against time to pass enough premises to meet its revised June fibre rollout targets.

Why wait?

Our methodology for the numbers analysis changed little from last month. You can see a chronology of our previous calculations here, but effectively we use our own baseline for premises passed up to March 31, and Ready For Service numbers — actual and predicted — to come up with a premises passed number for the current quarter.

A minor change is the baseline number that signifies NBN Co's rollout progress up until the end of March. A fresh release of data, and some further cross-checks, enabled iTnews to reverse-engineer 63,583 premises from NBN Co's official statistic of 68,200.

NBN Co has made it clear it won't be providing any official numbers for premises passed between April 1 and June 30, until at least the middle of next month.

"It is expected that the data wil (sic) be ready for publication on or around mid-to-late July 2013. At roughly the same time, this information should be made publicly available on NBN Co's website," the company indicated in a FOI request last week.

NBN Co attributed the delay in publishing official numbers to an "external review" that is to vet the figures for quality assurance purposes first.

In the meantime, interest in how NBN Co is tracking towards its revised June targets remains high enough to justify an update to our rolling progress analysis.

Read on for a full deconstruction of how the latest brownfields and greenfields data impacts NBN Co's ability to achieve its June targets.

Wild ride

NBN Co is targeting a range of between 190,000 and 220,000 premises passed with fibre by the end of June.

This consists of between 155,000 and 175,000 brownfields premises and between 35,000 and 45,000 greenfields premises.

Based on official figures to the end of March, NBN Co needs to pass at least 86,800 brownfields premises and 7140 new homes/lots to achieve the minimum of its targeted range.

This looked easy last month, but it's now clear that even those minimums could be fairly challenging to meet.

The problems begin in the brownfields rollout, where the predicted numbers for the month of June in 'early access' sites have been substantially downgraded month-on-month.

'Early Access' Premises  April  May June
Brownfields (May RFS) 3290 21,407 82,254
Brownfields (June RFS) 3290 25,708 49,755

As we indicated last month, the April figure is 'best effort' based on publicly-available data (a cross-check would be possible using NBN Co's historical footprint spreadsheet, but it isn't publicly-accessible).

iTnews' analysis shows that NBN Co actually beat its expectations for May by over 4000 premises passed. This was largely made possible by expediting work previously set down for June. Without this, NBN Co would not have cleared its May numbers.

FSAM Premises Passed 
4APL-02 1354
7HOB-01 170
7STH-02 360
8DRW-01 945
9CRC-04 2900

(Fibre serving area module works expedited from June to May. Source: iTnews analysis)

The big difference in 'early access' numbers is the month of June, where expectations for premises passed appear to be almost 32,500 premises lighter than before.

That would be catastrophic, if not for an increase in the number of premises in regular, non-'early access' brownfields sites that are expected to have been passed with fibre before the end of the month.

In the latest Ready For Service spreadsheet, sites fitting this description are:

FSAM Premises Passed 
2HOM-01 2200
2HOM-02 3000
4CAI-01 2300
4APL-04 2400
Total 9900

These are predicted figures, rather than actuals. Not being classified as 'early access' means there is no visibility into how the rollout is progressing in any of these areas, bar 4APL-04, which is known to be complete.

Clarity will come in the form of NBN Co's next Ready For Service spreadsheet, or its planned official update in mid-late July.

Altogether, this leaves us with a total of 88,653 brownfields premises passed in the June quarter.

The FSAM vs FDAs shortfall

Every 'early access' rollout site has a figure published for its total size (the 'fibre serving area modules' or FSAM) and for each piece of construction work that makes up that total size (the pieces are known as 'fibre distribution areas' - FDAs).

Last time around, we noticed the sum of the pieces did not always add up to the total size. We accounted for any "shortfall" between the FSAM size and the sum of the FDAs separately.

The size of the shortfall has grown over the past month.

Shortfall (FSAM vs Sum of FDAs) April May June
Brownfields (May RFS) - 3792 10,180
Brownfields (June RFS) - 9410 5740

These premises are in the rollout and haven't been captured by our calculations up until this point. However, because we can't be sure exactly where they fit (for example, whether they relate to FDAs completed a long time ago), the figures are excluded from calculation of minimum premises-passed targets. (See Section: FSAMs vs FDAs for more of our reasoning).

The latest range

Once again we can use all these numbers to check how NBN Co is tracking against its 155K-175K premised passed target in brownfields areas.

At the bottom end of the range, NBN Co is now looking at 152,236 premises passed by the end of June. This is close but below its target, and there's no room for further slippage.

Even if one takes NBN Co's baseline figure of 68,200 premises passed to March 31 (rather than iTnews' reverse-engineered calcuation of 63,583), the low-end is 156,853 premises passed. With a low-end target of 155,000, there's still very little margin for error there.

NBN Co's upper range estimate now appears to be between 167,386 and 172,003 premises passed (depending on which baseline you use). This is comfortably within the target range, but well short of last month where beating the revised June targets was a real possibility.

Read on for greenfields analysis and the 'big picture'.

Greenfields downgrade

As in brownfields areas, NBN Co is looking at passing substantially less greenfields premises in the month of June than first thought.

A preliminary run of the data still has NBN Co achieving a premises passed number within its 35K-45K target range, but in the lower end of that range. Again, there doesn't seem to be much possibility of beating the target range now.

Month Premises (April RFS) Premises (May RFS) Premises (June RFS)
April 5391 (5391)  
May 6323 6923 (6923)
June 7083 7069 5451

On that basis, NBN Co is looking at a minimum premises passed number for greenfields of 36,562 by the end of June 30, slightly above its minimum target.

This may be a bit conservative. MyNBN.info reports that NBN Co had passed 37,067 greenfields premises by the end of May. With the latest June statistics, that would put the company on track to pass 42,518 new premises with fibre — a far healthier result.

The big picture

If NBN Co stays on track, it will achieve total premises passed by fibre in the range of 188,798 and 214,521 by the end of June.

Its target is between 190,000 and 220,000.

It's no longer going to beat its revised June targets for brownfields, greenfields or the two taken together.

But it's still on track to meet them if it can muster one final construction push to get over the line in a fortnight's time.

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