NBN Delays and Increased Costs
Summary: There’s a bit of talk going around right now regarding delays and added costs to the NBN and, as always, this has triggered no small amount of debate. It’s important in matters relating to the NBN...
There’s a bit of talk going around right now regarding delays and added costs to the NBN and, as always, this has triggered no small amount of debate. It’s important in matters relating to the NBN that one does a little research after reading any news story, just to make sure that one is getting all of the correct facts. This is because, since its conception, discussions surrounding the NBN have often been riddled with inaccuracies and falsehoods.
These less-than-reliable statements have not always been intentional, as it’s a topic of considerable detail that requires a fair amount of knowledge to discuss accurately, but the end result is usually that Aussie readers are left with a not-entirely true impression of what the NBN means to them, as well as an incomplete view in matters such as the competency of its management and the timetable or costs of the overall rollout.
The reason for the most recently reported-on delay, a significant delay, is that the NBN Co was unable to procure a deal with Telstra as quickly as it had originally planned. The deal itself, which will last 40 years and ensure Telstra around $11 billion in today’s terms over its life, took a surprising 9 months longer to settle than original forecasts had predicted. As a result the overall rollout has obviously been affected, setting back the connection of hundreds of thousands of Australian homes by a number of months.
Originally the NBN Co had aimed for over 400 000 homes to be connected by mid-2013, that number has now fallen to a comparatively paltry 92 000. It’s nothing short of a frustrating setback and it unfortunately appears to be one that is now unavoidable.
Another area of that has sparked discourse is that the NBN network will cost a full $4.6 billion more than originally projected over the next ten years. $1.4 billion of that figure is due to building costs and the remaining $3.2 billion will be incurred from operating costs.
Some of the increases are due to an unplanned $800 million deal with Optus, according to NBN Co chief executive Mike Quigley. As a result of this deal costs have gone up in the short-term, but are expected to fall again after 2012.
"With the Optus deal we will be bringing some 500,000 customers onto the network that we were not anticipating in our original 2010 plan. Those are the customers who we were expecting to remain on the Optus hybrid fibre coaxial network. Now they will be coming across to the NBN so the capital expenditure costs for connections have gone up and the operational costs for migrations of those customers have gone up... And also we have an increase in revenue because those customers are coming onto the network.''
-Mike Quigley via SMH
The NBN is already active in numerous areas around Australia, but it’s still fairly early on and said areas are currently limited to the East Coast of the nation, generally favouring the South and mid-regions of the coastline. If you’re curious to see how things are progressing then head on over to the NBN map provided by NBN Co.
Major metro areas such as Melbourne, Sydney, Perth, Brisbane and Adelaide should start seeing the rollout within the next 1-3 years, although coverage will not be complete in said areas with some zones missing out until an as-yet unspecified later date.
To get an idea of NBN plan prices check out our price comparison service. Currently many Aussies expect NBN plans to be more expensive than those they currently enjoy on ADSL2+ or Cable, but you may be pleasantly surprised. Already NBN plans are beginning to represent closer price points to what Australian many users are accustomed to and we expect those price points to fall further as more providers start offering NBN plans, causing greater competition in the industry.
Check out prices for NBN plans
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