NBN Co puts initial FTTC cost at $2800 per premises

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NBN Co puts initial FTTC cost at $2800 per premises

Defers major expansion until after 2020.

NBN Co has revealed an initial trial cost of “about $2800 per premises” to deploy its fibre-to-the-curb (FTTC) technology, $628 above what it currently costs to roll out FTTN.

The figure is based on “initial limited trials” and the company said “more work is needed in the field” to solidify its price expectations.

Based on the FTTN experience, it is possible that estimate could drop. FTTN started at $2300 per premises, but as of last month had dropped to $2172.

But NBN Co’s chief network engineering officer Peter Ryan has warned the costs could also go the other way - as they did with HFC, which began at $1800 per premises in the 2016 corporate plan but have since blown out to $2259.

“We cannot discount the possibility that our projected FTTC cost per premises might increase in the field as we find out more about deploying FTTC in real world conditions,” Ryan said.

In a major blow to those hoping NBN Co might extend its FTTC footprint beyond the initially-planned 700,000 premises, the company has now indicated it won’t have the money to fund a major expansion until at least 2020.

iTnews understands that the FTTC footprint won’t be capped at 700,000 premises.

It is likely that several hundred thousand more properties will be added to the footprint between now and 2020.

Beyond that, however, any major upgrade of the FTTN footprint to FTTC would be wholly-predicated on the company hitting its 2020 target of eight million premises generating $5 billion a year in revenues, and that target is at risk unless it can raise its average revenue per user.

 “As long as we get eight million premises activated on the NBN network by 2020 –something we can only do by deploying FTTN – we will be generating $5 billion per year in annual revenues so will be in a better position to finance upgrades from FTTN to FTTC,” a spokesperson for the company said.

iTnews this week revealed the full reach of the planned FTTC footprint, after compiling an exclusive re-creation of the NBN three-year construction plan, which suggested more FTTC areas could be added to the build if the costs to do so were broadly in line with that of FTTN.

‘Can’t stop FTTN now’

NBN Co defended its decision to continue deploying FTTN despite a clear upgrade path to FTTC.

“The NBN is like an enormously long train,” Ryan said.

“You can’t just bring things to a complete stop and change direction, it just doesn’t work that way and never will.”

He said the upgrade path from FTTN to FTTC was a relatively simple process.

“If we choose to deliver FTTC in an area served by FTTN all we need to do is link into the fibre that is already serving the cabinet and then – with a very small amount of work at the nearby pit – we can run skinny fibre from that pit through existing ducting into the streets to deploy FTTC,” he said.

“We run that fibre into the distribution point units (DPUs) in the telecom pit in front of people’s homes and connect into the existing copper line serving the home and we are done.”

In the event that an FTTN-cabled area was upgraded to FTTC sometime in the 2020s, NBN Co said it would try to find a way to repurpose the FTTN street cabinets.

The company did not say what uses might arise. But because they are backhauled with fibre, one option may be to repurpose them as ‘edge’ data centres.

In the event they could not be repurposed, NBN Co indicated it could at least “be confident the assets would have by then delivered revenues for NBN Co for a very lengthy period of time and would have paid back the original NBN investment in the area.”

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