NBN Co's HFC sales freeze hits 1.38m premises

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NBN Co's HFC sales freeze hits 1.38m premises

Stakes are high.

NBN Co’s decision to pause new orders on its hybrid fibre coaxial network has now impacted around 1.38 million premises.

The new figure was revealed this afternoon by Telstra, which is now battling the flow-on effects of the freeze both in terms of its direct financial hit and its obligations to switch customers over to the NBN.

NBN Co announced the freeze in late November last year, with it coming into effect on December 11.

It kept rolling out its HFC network throughout the freeze, regardless of not being able to sell any of these new connections. It has also started to lift the freeze, although progress is very slow.

NBN Co has repeatedly declined - both in its results briefings and parliamentary committees - to restate its financials in a way that takes the HFC freeze into account.

It is now unlikely to do so before the next corporate plan is released towards the end of August.

However, the restatement is likely to be substantial given confirmation of the large number of premises impacted.

NBN Co previously suggested around 700,000 premises were reclassified as unserviceable and subjected to remediation works.

However, there were more HFC premises that didn't need remediating - or were freshly deployed during the freeze - but still could not be sold.

Telstra said today that it “understands that, to date, the HFC pause has impacted 577 parent rollout regions, covering approximately 1.38 million premises”.

A parent rollout region refers to the area in which HFC premises were located prior to being frozen and deemed unserviceable. Once reclassified as unserviceable, premises are placed into a “service continuity region” under certain conditions (specifically, the time left before legacy services to those premises are meant to be disconnected).

More time to switch

A lingering issue with the HFC pause has been whether retail service providers (RSPs) would get more time to sell NBN services to customers on paused connections, and whether those customers would get more time to make their transition choices.

Customers and RSPs typically have an 18-month window before a customer’s legacy service is disconnected.

But, as Telstra notes, “the experience for the vast majority of customers at HFC pause premises is that for at least five months of their migration window, they have been unable to place an NBN order.”

“Similarly, RSPs have been unable to undertake any of their usual preparatory activities required to connect the HFC pause premises to the NBN,” Telstra said.

“Because of the HFC pause, orders for NBN services are only able to be placed in respect of a small minority of HFC premises ( around one-third) across the impacted rollout regions.”

Telstra has spent the past several months informing regulators of a plan brokered between it and NBN Co to keep customers impacted by the freeze on their existing HFC connections for longer.

Though some of the details are set to remain confidential, the plan will mean customers in parent rollout regions will have the full 18 months to switch across, while those in service continuity rollout regions will have “approximately 12 months … during which they can migrate services”.

“Where the HFC pause has occurred late in the migration window for a rollout region, there will still be a minimum period of six months for the customer to place a migration order and for RSPs to engage in assisting customers with migration and performing their preparatory activities to enable connection to the NBN, following NBN Co’s ‘rerelease’ of the rollout region (and the HFC pause premises becoming NBN serviceable),” Telstra said.

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