NBN Co says it's still too early for MTM operating costs

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NBN Co says it's still too early for MTM operating costs

Attempts to calculate now would be “misleading”.

NBN Co does not have a “defined operating cost” for each access technology in its multi-technology mix, and claims any attempt to apportion costs now would be “misleading”.

The network builder said in answers to questions on notice at supplementary budget estimates hearings that information on infrastructure-related OpEx per premises “is not available”.

“NBN does not yet have a defined operating cost per premise metric for reporting actual costs incurred for respective access network technologies at this stage of MTM deployment,” it said.

“Further, our current operating costs include amounts that are not variable in nature (eg costs associated with the transit network and leases that also support future network rollout).

“Allocating these current costs to a sub-scale volume of premises would result in a misleading cost per premise average at this stage of deployment.”

The refusal to break down operating costs makes it difficult to understand the long-term cost of NBN Co’s technology choices, but also provides less fuel for those still agitating for a return to fibre-to-the-premises.

Leaked internal documents last year pointed to operational costs of the FTTN network being 67 percent more than for FTTP, and 25 percent more for HFC, according to University of Melbourne Laureate Emeritus Professor Rod Tucker.

“Over the lifetime of the network, this difference could amount to billions of dollars, greatly reducing the overall difference in costs between FTTN and FTTP,” Tucker said.

Richard Ferrers, a research data analyst at The Australian National Data Service (ANDS) at Monash University, has also analysed the various costs of the FTTP and FTTN rollouts, using some of the same leaked OpEx numbers.

“To the extent the operating costs and revenue numbers are correct, they shift the value of FTTP and FTTN, towards favouring FTTP,” Ferrers said.

Labor's broadband spokesperson, Michelle Rowland, said in a statement yesterday that it was "unfathomable that NBN Co cannot answer basic questions about its operating expenditure for different access networks".

One of the long-term costs for the FTTN network is the maintenance of the copper assets. Financial analysts have previously put that cost at between $700 million and $1 billion a year.

While NBN Co did not provide any OpEx numbers to questions on notice, it did provide the rollout costs per premise, which maintain an upfront cost of $4400 per premises for FTTP versus $2300 for FTTN or HFC.

It declined to detail the cost of fibre-to-the-basement installations, citing commercial in-confidence owing to the “competition” it faces from TPG on that portion of the build.

NBN Co also said it expected to update its three-year construction plan before the end of 2016, as well as improve the searchability of coverage maps on its website.

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