NBN Co has ditched plans to use the bulk of Optus' hybrid-fibre coaxial (HFC) network and will instead deploy fibre-to-the-distribution point (FTTdp) technology to around 700,000 premises nationwide.
The network builder said bringing the Optus HFC network up to the standard required for the NBN would be too expensive and take too long.
NBN Co had planned to upgrade around 450,000 premises within the Optus HFC network that it gained access to under its $800 million, 2011 deal with the telco for use in the NBN.
Instead, it will now keep only 25,000 Optus HFC premises, which have already been launched around Redcliffe in Queensland.
The remainder of premises within the Optus HFC footprint will be ditched in favour of fibre-to-the-distribution point. The Optus HFC network will still be decommissioned as per the original deal.
"We have tested FTTdp over the last year and we're confident we can now deploy the technology in areas where it makes better sense from a customer experience, deployment efficiency and cost perspective," NBN Co chief network engineering officer Peter Ryan said in a statement.
"This includes premises in the FTTN footprint that have too high a cost per premises (CPP) and premises served solely by the legacy Optus HFC footprint that are yet to be made ready for service."
NBN Co's plans to overbuild the Optus HFC network were first revealed in leaked internal documents late last year.
The documents indicated NBN Co had discovered the network was degraded and not fit for purpose, with 470,000 Optus HFC premises needing to be overbuilt at a cost of as much as $375 million.
They also revealed that having to overbuild the network would mean NBN Co would miss its rollout targets by 633,000 premises, leaving those homes and businesses unconnected until 2019.
The technology switch also means Optus will miss out on winning a similar deal to Telstra's $1.6 billion contract to design and manage the construction of its own HFC network for the NBN.
In a statement Optus said it welcomed NBN Co's decision.
"FTTdp is another addition to NBN’s multi-technology mix and we hope it ensures this important national project can be delivered quickly and efficiently."
NBN Co first started trialling FTTdp in March this year, when it indicated that it would likely flip 300,000 premises from FTTN and fixed wireless to FTTdp.
FTTdp sees fibre run to the front of a customer's premises, using an existing copper cable for the lead-in. It avoids the cost of an FTTN cabinet by using a distribution point unit for the fibre-to-copper connection, powered by the customer's premise.
Last month the network builder revealed it would switch 1.2 million premises out from its wider HFC footprint - which is made up predominantly by Telstra HFC - to FTTN/dp or fibre-to-the-basement in order to lower costs.