The ongoing increases in costs and delays of the NBN stems from political parties trying to upstage each other rather than making decisions in the national interest. Paul Budde, one of the world’s foremost telecommunications management and business consultants, explains.

The problem with the NBN multi technology mix (MtM) policy is that they are using old technologies and if you are going to upgrade this, you will come across lots of nasty surprises — as already has become clear in relation to the fibre to the node (FttN) part of the project. Some parts of the cable infrastructure is even more than 50 years old, in relation to the hybrid fibre coaxial (HFC) network, this dates back to the 1990s, so also old infrastructure.

As a result, we see ongoing increases in costs (already from $25 billion to $50 billion) and delays (already from 2016 to 2020). No doubt more problems will arrive with further costs and further delays. A “clever” way of avoiding this issue is that NBN is simply putting problem areas on the backburner. This list already has more than 200,000 premises on it.

It is very frustrating as all of these problems can directly be related back to the pollical issue where parties try to upstage each other in the interest of their political parties rather than making decisions in the national interest.

Now the HFC issue in more detail.

In my discussions first with Conroy and later with Turnbull I suggested that – as part of saving on the fibre to the home (FttH) – they should leave HFC alone. Most HFC subscribers have a good quality service (better than FttN) and the government could look at upgrading HFC to FttH later (eg after 2020/2025). This would have allowed the government to spread its investments over a longer period and this would allow us  to also profit from further technology developments (eg by that time FttH would be cheaper than HFC).

Furthermore, the question was always if the Optus HFC network could be upgraded at all as the quality was rather poor. While several parts of the Telstra HFC network were upgraded also here many parts date from the 1990s and require significant investments for upgrading. This is what the NBN company  is now belatedly realising. With these extra costs, the question again is why not have a plan that will see a full FttH upgrade?

Based on my recent trip to Europe, I am just writing an analysis on the arrival of wholesale only networks around the globe (similar to NBN) while none of them are working on the same scale as NBN, at the same time, none of them are using MtM. They all are building FttH networks.

Paul Budde

Paul Budde is one of the world’s foremost telecommunications management and business consultants. His expertise lies in his ability to analyse the telecommunications, internet, e-commerce and broadcasting markets, and to identify major business trends and developments in the digital, sharing and interconnected economy.

Paul’s extensive market knowledge, global network and strategic business advice can assist organisations and industry sectors to transform themselves, enabling them to take advantage of opportunities created by the digital economy.

For more information see his blogYou can also follow Paul on Twitter @paulbudde.

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Paul Budde: and so the NBN blame games start