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.
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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'.

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