nbnTM, the builder of Australia's National Broadband Network (NBN), says it now does not expect to make the 500,000 connections it's previously said would be made on the hybrid fibre-coax (HFC) network for which it paid Optus AU$800 million.
Under questioning from opposition senator Stephen Conroy at a hearing of the Senate Select Committee on the National Broadband Network today, nbnTM CEO Bill Morrow said the original expectation under the deal was that around 500,000 homes would be connected via the Optus hybrid fibre-coaxial (or, more generically, cable broadband) network.
That would have priced each connected customer at $1,600 – but it's not going to turn out that way.
While Morrow did not have a final number to hand for the expected reach of the network, he told the committee that 500,000 connections “won't happen”.
The main reason Morrow gave was the number of multi-dwelling units (MDUs) passed by the network, because nbnTM doesn't consider HFC suitable for delivering connections to apartments.
Apartments are more likely to be served by fibre-to-the-basement (FTTB) installations.
The senate committee also learned that while the company hasn't started mass deployment of HFC modems yet, the contract for devices has been given to Arris. The only other bidder for the contract was Technicolor, which last year acquired Cisco's set-top-box business for €550 million.
Conroy seems to think it's important to know which chipset the Arris devices use, something Morrow had to take on notice because he said nbnTM doesn't “open the boxes” to see what's inside.
Vulture South believes we can help settle that question: according to Broadcom, Arris is one of its customers, as this 2015 media release states.
Morrow told the committee the company's data suggests fibre-to-the-node customers are getting 83 Mbps average download speeds, and that any shortfall is more likely to be because retailers aren't buying sufficient connectivity virtual circuit capacity (CVC is the shared backhaul capacity that connects customers to retailers' infrastructure).
This sounds like it could be on the mark. As MyNetFone's CEO Rene Sugo told a tech press conference over the weekend, the high CVC cost is already a challenge for ISPs, and that's likely to get worse over time, because rising average revenue per user (ARPU) is built into the NBN's financial assumptions. ®