The rollout of Australia’s high-speed National Broadband Network (NBN) is halfway complete. More than 5.7 million homes and businesses now have access to fast broadband by connecting to the NBN through a retail service provider. The NBN is structured as a wholesale-only, open-access broadband network whereby access is provided on equivalent terms to all retailers for provision to end users. This is intended to level the playing field for retailers so as to create competition within the industry and provide choice for consumers.
Australian Government-owned broadband infrastructure company nbn is rolling out the network and is currently adding up to 100,000 new properties to its footprint each week. The Government expects the network to provide peak wholesale download data rates (and proportionate upload rates) of at least 25 Mbps to all premises and 50 Mbps to 90% of fixed line premises by 2020. To achieve these objectives nbn is rolling out a multi-technology mix network including wired communication via copper, optical and hybrid-fiber coaxial (HFC) as well as radio communication via fixed wireless and satellite networks.
To reach the half way milestone nbn launched two satellites, built 1,700 fixed wireless sites, employed 6,000 people, installed 21,000 nodes and laid 63,000 kilometers of fiber. The company now plans to begin further construction work across suburbs within Australia’s capital cities as well as outer metro regions.
The rollout of the NBN is scheduled to be three quarters built by mid-2018 and complete by 2020.
Our analysis
The NBN represents the largest infrastructure project ever to be undertaken in Australia. The new national high speed broadband and telephony network aims to foster productivity and provide a platform for innovation in order to deliver economic and social benefits for all Australians. This ambition of universal connectivity is made difficult given the country’s expansive geography and dispersed population.
The network will cover even the most remote and inaccessible areas of Australia in an attempt to bridge the digital divide between city and country. In doing so, the network will facilitate a range of benefits for communities across Australia such as access to online education tools, on-demand entertainment and remote work opportunities.
The success of the NBN to deliver on its aim will ultimately come down to the speeds experienced over the NBN. The ability to deliver wholesale speeds which are currently around eight times faster than the average ADSL2 service provided to the majority of Australians will be influenced by a range of factors such as equipment quality, signal reception and the way retailers package their services. Juggling the service experience whilst adhering to a budget acceptable to Australian taxpayers is the challenge for nbn, which will need to hit timely milestones and manage customer service expectations to reach success.
Performance for FY2017, ending 30 June 2017 was positive with the number of premises covered by the network rising nearly 97% from 2.9 million to 5.7 million while active connections rose 118% from 1.1 million to 2.4 million according to IHS Markit analysis of end June 2017 reports released by nbn.
A snapshot of current performance reveals a total of 97,309 additional properties were covered by the network in the week ending 29 June 2017, including an increase of 86,678 in Brownfield (inner city developed) areas, 5,699 in Greenfield (new development) areas and 4,932 premises in fixed wireless and satellite areas. During the week an additional 42,848 premises had services activated on the network, including 41,242 on fixed line services and 1,606 using satellite and fixed wireless technologies. Brownfield sites represent 79% of total activations on the network by end June 2017 followed by Greenfield sites (10%), fixed wireless (8%) and satellite (3%).
David Scott is a principal analyst specializing in the media markets of the Asia-Pacific region at IHS Markit. For more information, visit IHS Markit’s TV Media Intelligence Service.