NBN Co raises expected FTTC cost to $2900

NBN Co is already expecting the cost per premises in its forthcoming fibre-to-the-curb footprint to increase by $100 on earlier forecasts, topping $2900.

The figure is laid out in the network builder’s long-awaited corporate plan update released today, which covers the period from 2018 to 2021.

NBN Co had said back in March that the initial trial cost of FTTC was “about $2800 per premises”. It had noted, however, that more work was needed to solidify its estimate.

Now it has emerged that FTTC will cost more than thought.

“The weighted average [cost per premises] for FTTC is forecast to be $2900 at the end of the build period,” NBN Co said.

“Compared to alternate technologies, this reflects the additional cost of fibre deployment to end-user premises beyond FTTN deployment, but eliminates the need for costly lead-in costs which are incurred for each premises in FTTP.”

CEO Bill Morrow in a briefing said the $2900 price tag had “some predictive characteristics” embedded within it, due to the fact that the company is still yet to complete an actual FTTC connection.

“So [the cost per premises] could fluctuate up and down,” Morrow said.

The cost increase is likely to be a blow for those that have been advocating for an increase in the use of FTTC in the rollout.

It means that there is now a $726 per premises difference between the current cost of deploying FTTN versus the expected cost of deploying FTTC.

However, NBN Co is forecasting that the cost per premises for FTTN is likely to hike up by 2020, from $2174 to $2300.

That would put the cost difference between FTTC and FTTN at $600 per premises, slightly below the previously reported gap.

FTTC delay

Another major impact of the FTTC rollout is that NBN Co has been forced to revise down its ready for service (RFS) forecast for FY18, from 9.1 million to 8.7 million premises.

The corporate report blames two factors for the downgrade: 200,000 are simply ghost premises caused by bad map data, but some are also a result of the FTTC rollout.

NBN Co said 200,000 premises that had been targeted for FTTC this year “are now planned for FY19 due to the introduction of FTTC, which takes longer to construct".