NBN Co to beat its June rollout target

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NBN Co to beat its June rollout target
NBN Co is smashing uncertainty over its June targets.

Revealed: The numbers, and how they will do it.

NBN Co is on track to beat its revised June rollout targets by up to 13,000 premises, an analysis by iTnews can reveal.

The turnaround is captured in the latest update to the company's Ready For Service spreadsheet, which shows when cables are expected to be able to carry retail internet services.

The numbers come after a couple of high-pressure months for the company. They also could not have come at a better time, with NBN Co's executives due to front Budget Estimates on Thursday night.

iTnews' analysis shows NBN Co is on track to pass between 171,836 and 185,808 brownfields premises with fibre by the end of June.

Its target is between 155,000 and 175,000.

NBN Co is making a similar recovery in new housing estates. Revised June rollout targets for those had it passing between 35,000 and 45,000 new homes, but actually it is on track to pass between 41,825 and 47,243 premises.

Combined, NBN Co is looking at between 213,688 and 233,051 premises passed by the end of June, eclipsing the target range of between 190,000 and 220,000.

iTnews' range calculation is quite likely conservative — NBN Co publishes rollout data across a number of databases, and not all are public.

Several factors have also emerged in the past week that present unknown (but most likely positive) impacts.

The story to date

NBN Co has published official rollout statistics up to March 31 this year.

Premises Passed June 2011  June 2012 Dec 2012 March 2013
Brownfields 18,000 29,000 46,100 68,200
Greenfields - 10,000 26,300 27,860

(Source: NBN Co rollout updates)

On paper, they ring alarm bells. If NBN Co is to meet its minimum downgraded June target, it has to pass at least 86,800 brownfields premises between April and June, when it managed to pass just 22,100 in the preceding three months.

And the same for greenfields — requiring 7140 new homes passed, when it managed just 1560 in the three months prior.

NBN Co's March quarter update provided no commitment or re-commitment to meet these June targets (pdf).

"NBN Co remains on course to deliver better broadband to every Australian by June 2021," is all the company said.

The March quarter numbers are ultimately trivial. They merely show why NBN Co downgraded its rollout targets ten days prior.

The more important set of numbers are those for the June quarter. This is what we set out to calculate — and reveal today.

Continue to the next page to see how NBN Co will exceed its brownfields targets.

Defining 'passed' and 'ready'

NBN Co's targets are in "premises passed", but the company does not report those numbers on a rolling basis.

It instead provides monthly, publicly-accessible updates when premises are expected to be declared "Ready For Service".

NBN Co's definitions say that if premises are "Ready For Service", they are considered to have been "passed".

On that basis, armed with the latest iteration of NBN Co's Ready For Service spreadsheet, it is possible to calculate expectations for premises passed this quarter.

June quarter numbers

The latest iteration of the Ready For Service spreadsheet is the first to put actual dates on every fibre distribution area (FDA) that the company has under construction in 'early access' rollout areas.

Previously, most FDAs — which contain up to 200 premises — were simply dated "expected to complete prior to 1 July 2013". Month-to-month, there was no indication of how construction in these areas was tracking.

All 'early access' FDAs are now to be Ready For Service either in May or June. 

'Early Access' Premises  April  May June
Brownfields 3290 21,407 82,254

(Source: NBN Co Ready For Service 14 May 2013, 'Early Access' numbers).

The April figure is 'best-effort' based on FDAs that met April service deadlines. Our retrospective analysis shows many didn't, and simply rolled into the May or June numbers.

It would be possible to cross-check how conservative (or not) the April figure is by consulting NBN Co's historical footprint spreadsheet, however this is not a publicly-accessible resource. 

The next challenge is working out, from publicly-available figures, the contribution of non 'early access' fibre serving area modules (FSAMs) and FDAs to the June targets.

Our analysis found only one possible FSAM — 4APL-04, which is sized at 2400 premises. It is listed to be Ready For Service on June 1. iTnews confirmed with an NBN Co spokesperson that the date signified it would be 100 percent complete.

It's quite possible there are more that are not on publicly-listed databases.

There's also an accounting anomaly to contend with. NBN Co has been vying to convert 82 non-'early access' FSAMs to 'early access' status. This happened quietly on May 15.

The change shouldn't be captured in the May Ready For Service plan (given it runs to April 30), but it is. Our analysis shows FDAs in 30 of the 82 newly-minted 'early access' FSAMs are already listed in the 'early access - brownfields' tab of the spreadsheet. An NBN Co spokeswoman confirmed they've been listed in there for months, pre-dating regulatory approval of the status conversion.

The likely net effect is that FSAMs that we might have otherwise accounted for as non-'early access' sneak into the 'early access' numbers.

On that basis, the total brownfields contribution we can calculate is 109,351 premises passed between April 1 and June 30.

FSAMs vs FDAs

For 'early access' sites, NBN Co publishes the number of premises it expects each rollout area — called a fibre serving area module (FSAM) — to cover, and the (usually 16) FDAs that make up that FSAM count.

One should be able to crosscheck the total FSAM number by adding together the size of all FDAs in that FSAM i.e. the sum of its parts. 

For FSAMs due for completion up to June 31, this produces some variations. For example:

FSAM name Estimated FSAM size  Sum of listed FDAs Variation (Premises)
2HOM-02 3000 3006 6
7LAU-03 2700 2736 36
3SMR-04 2100 795 1305
4TNS-03 2200 1032 1168

(Source: iTnews' analysis of NBN Co Ready For Service 14 May 2013, 'Early Access' numbers).

In other words, the sum of the publicly-listed parts of some FSAMs is quite a bit less than the expected whole.

There's a few reasons why some FSAMs seem to be down a few FDAs. The most obvious is those FDAs were completed prior to the FSAMs being declared 'early access'. As such, their rollout progress would have been invisible from earlier spreadsheets.

Whatever the reason, these premises are still in the rollout but aren't captured by our calculations up to this point.

Shortfall (FSAM vs sum of FDAs) April  May June
Brownfields - 3792 10,180

(Source: iTnews' analysis of NBN Co Ready For Service 14 May 2013)

Vetting the baseline

We identified one other variable in calculating NBN Co's premises-passed progress: where the 68,200 baseline for the March quarter comes from.

The danger of using it outright is that it might contain some overlap with our own calculations.

A complicated data matching exercise using seven spreadsheets allowed us to reverse-engineer almost the whole figure and exclude a portion we could not explain (and therefore that could be susceptible to double-accounting).

About 45,730 premises passed to date are likely to be from 24 completed FSAMs that NBN Co released details for in late April.

Without access to the historical footprint, determining the remainder of the number was tricky, but possible. We found 16,755 premises by correlating changes in the different datasets.

FSAM Premises 
2CFS-02 2655
3BAC-02 2100
4APL-01 1900
2GOS-02 2000
9CRC-01 2700
9CRC-05 2700
4TOB-01 2700

(Source: iTnews' data-matching)

That leaves us with 62,485 premises passed that we were able to vet. Erring on the side of conservatism, we used this figure as our baseline for premises passed to March 31.

The progress range

This is enough to calculate roughly whether or not NBN Co is on track to meet or beat its June rollout target in brownfields.

At the bottom end of the range, we used (iTnews baseline + April-June quarter), which comes to 171,836 premises passed by the end of June.

The absolute upper end of our range includes the FSAM shortfall figure. It's a bit of an unknown exactly how to account for this: potentially, some of the 13,972 premises caught in our shortfall calculation are among the 5715 premises we couldn't vet in NBN Co's March quarter figure. We don't know.

Regardless, it gives a top-end estimate of 185,808 premises passed by the end of June.

On that basis, at worst NBN Co's rollout is to fall within its June targets (171,836 premises passed in a 155k-175k target range).

In a best case scenario, NBN Co could exceed the revised June target range by up to 13,000 premises passed.

Obviously these numbers are based on NBN Co's Ready for Service expectations, rather than actual achievements.

But if NBN Co can stay the course over the next five weeks, the turnaround will be a major credit to the company and its contractors.

Read on for the greenfields recovery.

The other part of the June target number is greenfields. Though NBN Co has published a new set of data for May, the analysis is a task-and-a-half, and one we haven't finished crunching.

A preliminary analysis of the May statistics shows little change to our rundown of last month's figures, which had NBN Co passing 18,797 new homes and apartments between April 1 and June 30.

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

(Source: Ready For Service spreadsheets, April and May 2013).

The main change is an increase in the number of greenfields premises expected to be declared Ready For Service in May. The unknown is how many of those are delayed from the April figure. We won't know until we've finished running the numbers.

Barring a disaster, the company will have no problem hitting its June rollout numbers here.

iTnews has calculated a premises passed range of between 41,852 and 47,243 by the end of June. The target is 35k to 45k.

The 41,852 figure excludes the April premises count. This is conservative, but shows NBN Co is still in its target range.

The big picture

If NBN Co stays on track, it will achieve total premises passed by fibre in the range of 213,688 and 233,051 by the end of June.

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

At worst, there's enough padding in the figures for some slippage to occur, while keeping the company in its June target range.

One final what-if scenario

NBN Co has another 8500 premises passed in the wings, courtesy of a $9 million buyout of TransACT's fibre-to-the-premises assets in Canberra.

The acquisition must pass regulatory hurdles, but could be a handy numbers boost for the June targets if the paperwork passes muster expediently.

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