NBN Co won't shadow TPG for basement fibre

NBN Co plans to expand its fibre footprint in multi-dwelling units at a rate of 20 new buildings per month, but won't seek to directly shadow competitor TPG’s fibre-to-the basement rollout, the company today revealed.

NBN Co chief customer officer John Simon told a parliamentary committee overseeing the company’s progress that NBN Co was prepared to overbuild equipment already installed in multi-dwelling buildings to compete with commercial retail service providers.

However, the company would not be focusing specifically on TPG, he said.

“Like any commercial organisation, we would look at competitive threats, and therefore we’ve identified those areas open to competition and it’s important for us to provide a service into those areas," Simon said.

"We’re determining the rollout on our own criteria based on where we believe we can roll out effectively with the right level of connectivity and turning on the right level of revenue."

He said that despite it still being early days - NBN Co has installed the service in 12 MDUs containing an average of 100 premises so far - adoption of NBN Co connections in multi-dwelling units was exceeding expectations.

The monthly take-up rate for the service, which ISPs have been reselling for around six weeks under a trial of the service, was currently around six percent - slightly ahead of NBN Co’s expectation of around four percent per month, Simon said.

“It’s very early days but the take-up rate is above the projections that we have,” Simon said.

He told the committee NBN Co aimed to expand its MDU footprint at a rate of 20 new buildings per month by connecting fibre to the basement (FTTB).

FTTB has been identified as a potentially major weakness in NBN Co’s business model.

Internet service provider TPG is currently rolling out fibre to the basement in several metropolitan areas as part of its plans to build FTTB infrastructure serving around 500,000 dwellings, in direct competition with NBN Co’s network. Telstra has also shown some willingness to enter the FTTB race.

Such competition could potentially deprive NBN Co of billions in revenue and seriously damage its prospects of generating a return on the Government’s investment in the network.

Furthermore, the competition regulator recently announced that TPG’s plan was not in breach of NBN level-playing field provisions in the Telecommunications Act, and that it would not oppose the plan.

Following the ruling Communications Minister Malcolm Turnbull revealed the Government could potentially introduce a new carrier license requiring FTTB providers to provide wholesale access to their infrastructure.