Initial NBN Build Complete; Next Phase Announced to Meet Future Demand

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With the initial NBN build now complete, NBN Co announced the next phase of the national broadband network to meet Australia’s future data demands in its Corporate Plan 2021, outlining how it will provide access to higher wholesale speeds and greater capability on its network to millions of customers across Australia.

Corporate Plan 2021 highlights:

  • NBN Co’s highest peak wholesale speed tiers of 500 Mbps to 1 Gbps available on-demand to 75% of homes and businesses on the fixed-line network by 2023, plus dedicated regional co-investment funding;
  • Investment in a range of initiatives to provide businesses across Australia with on-demand capability to support innovation, productivity and growth; and
  • AU$4.5 billion network investment plan to be funded by private debt, which is forecast to create an additional 25,000 jobs in Australia.

NBN Co will take advantage of the momentum established in building the initial network by bringing forward the next phase of planned network investment to help meet future demand for higher speed broadband services. This demand has been particularly accelerated by changes in the way people work, study and communicate in response to COVID-19. It is also clear that economic recovery will in-part be driven by digital enablement and innovation.

Network Investments

NBN Co will allocate $3.5 billion to network investments across Fibre-to-the-Node (FTTN), Fibre-to-the-Curb (FTTC) and Hybrid-Fibre-Coaxial (HFC) networks. So, by 2023, 75% of premises in the fixed-line footprint will have access to peak wholesale speed tiers of 500 Mbps to 1 Gbps. 

As this investment takes place, many premises currently connected by FTTN that require higher speeds will be able to access higher wholesale speed-tiers via Fibre-to-the-Premises (FTTP) technology. NBN Co will use the existing fibre infrastructure already built to nodes and invest in the continued rollout of fibre deeper into community areas.

At that point, NBN Co will complete the build of the fibre lead-in to the premises. Following further detailed planning and development of business rules for lead-ins, NBN Co will be in position to release further information on timing and locations.

NBN Co also aims to enable FTTC-connected premises to access the NBN Home Superfast and NBN Home Ultrafast wholesale speed-tiers through on-demand enablement and deployment of G.Fast capability, or the provision of fibre lead-ins in certain circumstances. NBN Co will further dedicate significant investment to benefit the 2.5 million premises in capital cities connected by HFC technology. The planned upgrade of the entire HFC footprint will offer all customers in HFC-connected premises access to the NBN Home Ultrafast plan.

Supporting Australian Businesses

NBN Co will invest $700 million over the next three years to support business innovation and productivity, recognising the growing importance of online collaboration and cloud-based tools and increasing demand for premium-grade business solutions.

The centre-piece of this investment is the creation of 240 NBN Business Fibre Zones nationally, including presence in 85 regional centres. All businesses within these zones (over 700,000 business premises are expected to be covered) will have access to NBN Co’s Enterprise Ethernet, with wholesale prices for service providers significantly reduced. NBN Co is investing to deliver the necessary fibre infrastructure to support Enterprise Ethernet. A further $50 million will be invested over three years to work with local, state and territory governments to identify opportunities to extend business-grade services outside of designated NBN Business Fibre Zones.

In addition to the network improvements, NBN Co will invest $1.5 billion to connect over 300,000 new premises, extend COVID-19 relief measures into FY21, and invest in IT simplification to reduce costs and enhance overall customer experience. NBN Co will also increase its focus on regional areas through investments in fixed-wireless and satellite networks and an expansion of fixed-line networks in regional areas.

Funding and Forecast Economic Outcomes

In May 2020, NBN Co entered into agreements with Australian and international banks for revolving credit facilities totalling $6.1 billion. Each have five-year terms and represent NBN Co’s inaugural long-term borrowing from private debt markets. The financing was oversubscribed, representing a strong endorsement of NBN Co’s credit profile and business outlook as it moves from completion of the initial rollout to the next phase of operations.

By developing the network to deliver higher-speed services sooner rather than later, economics firm AlphaBeta estimates that national productivity will improve and potentially add $6.4 billion to the annual GDP from 2024, while creating an additional 25,000 direct, indirect and induced jobs over the next two years.

NBN Co CEO, Stephen Rue commented: “Now that we have completed the initial build, we will continue to invest in the NBN to be ready to meet the evolving needs of residential and business customers. With millions of people working and studying from home, demand for higher speed broadband services is growing. We are investing now and starting work immediately to meet this demand.

“The initiatives in this investment plan will have a real and positive impact on Australia’s retail and business telecommunications landscape and help lift our digital-capability. With residential and business customers, and education and healthcare service-providers more reliant on broadband than ever before, we believe the time is right to invest in the network capabilities that Australia will need in the years to come.”