NBN Co finally breaks out cost of FTTB

NBN Co has finally broken out the cost of deploying fibre-to-the-basement technology, putting it at $2822 per premises.

The company called the release of the figure a “one off”, as first reported by CommsDay, suggesting it plans to continue to do as it has previously done and aggregate the cost per premises of fibre-to-the-node (FTTN) and FTTB.

This approach has largely helped NBN Co hide the cost of the FTTB deployment.

NBN Co reported earlier this week that its combined FTTN/B costs were $2222 per premises. When asked directly to split out the number on a second consecutive results call, CEO Bill Morrow declined.

The $2822 figure makes FTTB the third highest cost per premises behind brownfield fibre-to-the-premises ($4392) and fixed wireless ($3645).

NBN Co is likely to have combined the FTTB and FTTN numbers because FTTB is used in a very small part of the network and would not have the same economies of scale as other technologies.

The network builder said in a combined FTTN/B number, FTTB made up just two percent of the premises.

“Given the low volumes of premises completed for FTTB to date we have not historically
disaggregated the CPP to split between FTTN and FTTB,” the company said.

It also said that disaggregating the two “requires an allocation of costs in respect to shared fibre network that supports both FTTN and FTTB premises".

“This allocation is based on estimation only given individual duct routes/fibre distances are not known solely for FTTB premises,” it said.

NBN Co started trialling FTTB technology in 2014 in response to the competitive threat posed by TPG and its stated efforts to connect 500,000 city apartments with its own FTTB service.

The government-funded network builder began construction a year later.

The competitive threat, however, has since been largely neutralised, and TPG last year said it may never deploy FTTB to the levels it had previously targeted.

For NBN Co, the FTTB it has deployed offers a potential path to higher revenue in future, given it can be upgraded with G.fast technology to boost beyond 100Mbps.