NBN Co: Comparisons With NZ's Ultra-Fast Broadband Are 'Apples and Oranges'

Image: iStock

The latest blog post from NBN outlines a number of reasons why comparing the broadband rollouts of Australia and New Zealand is like comparing apples and oranges. To make his point, NBN CEO Bill Morrow finds an orange.

Comparisons between Australia and New Zealand are natural -- both countries think they invented the pavlova and neither wants to claim ownership of Russell Crowe. In this morning's post, Morrow tries to explain why we didn't do things the way the Kiwis did.

Morrow focuses on NZ telecommunications infrastructure provider Chorus, who won a tender from Crown Infrastructure Partners (NZ's loose equivalent to NBNco) for 70 per cent of New Zealand's FTTP rollout.

When the NBN was first formed in 2009, the Rudd government threatened to split Telstra into separate companies handling the retail and wholesale aspects of the business.

Chorus is the result of the New Zealand government following through on a similar threat with Telecom New Zealand -- now Spark -- and then requiring the infrastructure part of the business to become wholly separate as a requirement for winning the Ultra-Fast Broadband tender.

The biggest difference here is that our monopoly telco was unwilling to play nice with our government while New Zealand's was, albeit with some legislative nudging. As a result, NBN has had to negotiate with Telstra for access to the existing infrastructure, and pays almost $1000 to Telstra in leasing or acquisition costs for every connection in a built-up area.

Morrow mentions labour costs and the different starting technologies there were to work with as explanation for the difference in cost. He mentions one of the reasons Chorus has been able to reduce its costs:

"Much has been made about Chorus reducing [its] FTTP delivery costs over the last few years but the reality of the matter is that a major reason [its] FTTP costs have come down – and this is something Chorus have already made public – is that they were compelled to start [its] FTTP rollouts in more expensive areas and then moved the build to many cheaper areas later on."

The NBN rollout also started in more expensive areas as a political ploy to try show that something was being done for regional Australia.

Finally, Morrow brings up the reason we all knew was coming: distance.

"The final difference between our goals is simply one of scale -- Australia is a massive country and is roughly 30 times the size of New Zealand.

"Moreover, we have to deliver a fixed-broadband model to 93 per cent of premises in this huge country – in New Zealand the UFB-1 model only calls for FTTP to be deployed to around 75 per cent of the country – that is an absolutely massive difference right there. UFB-1 is only delivered to areas within 50km from an urban area."

Australia is a big country but we're deceptively centralised. Approximately two-thirds of Australians live within 50km of a capital city and almost 85 per cent live within 50km of a coast. Distance is still a challenge.

[NBN]


Comments

    While Telstra has been a prick, knowing full well that ultimately they would be able to sell off their infrastructure at the very start of talks about NBN; it only gets worse when you take into account that they are aware that they will be buying the infrastructure back when it devalues.

    That said, it was unfortunately always going to be them thanks to how hard it is to find infrastructure for other providers outside of the core populations. People like to say how TPG could have picked up the pieces, but the reality is that rural would have been fucked forever as a result. Unfortunately our spread out population means that only Telstra could have provided the upgraded service within a decent amount of time.

    Catch 22; we would have to either leave rural Australia in the dust as per usual or the whole network would be stinking pile of shit... unfortunately we got the shit.

      Hey mate. We didn't want to sell it. We had no choice.

    both countries think they invented the pavlova

    False. One country did invent the pavlova, and one (large and dusty) country tries to claim credit for shit the other did. You can keep Russell Crowe btw.

      And on a more serious note: you'd think the large distances in Australia would probably be about the same sort of logistical issue as the mountains, rivers, and oceans that the Kiwis had to face.

        Nah mate... we live in the magical land of Oz! Them desserts are deadly!

        Just go watch Dorothy's Return to Oz as a referrence! And watch out for that Nome King who's hanging out in the mountains!

    Can confirm the rollout in NZ is a machine.

    Had a friend on the other side of Auckland. They put the fibre in, while that was happening they booked a hook up. It was done about a week after the line went in.

    They have just started running it down my street (last two weeks) just booked my hook up to the house for a week from now. Yeah boi! Symmetric fibre to the modem here I come!

      Sounds pretty much on par with the FTTP roll outs before the change. General build comes in the area they put the trench on the whole street and put the outside box and then declare area RFS when it's done...

      Book with ISP to get NBN to come down and install inner box, wait because obviously massive influx for bookings but once the tech got here a few hours of so of wiring the inner cables via existing phone ducts to the inner box and then a line check then final call to ISP and a week or so later call from ISP, given the log-in/pwd and bam fast access!

      FTTN/HCF installs however... completely different kettles of fish

        Booked my fttn install. 5 wks.... to an established fttn area where the house has the outside box but no inside box.

    Did Morrow *really* just mention the whole drama with Telstra and just gloss over the very minute detailed difference of FTTP to FTTN changes there?

    The one where instead of just leasing the existing ducts we decided to instead put them in a position where we are "leasing" their ducts *and* paying to use/acquire their copper *and* paying them for compensation on lost revenue?

    load of excuses for a massive taxpayer payout to telstra

    Yeah, it is a bit rich considering that one of the major cost expenditures is the leasing of the copper lines we could have replaced with fibre.

    Also costs involved in powering the NBN mobile towers to reach rural customers (often about 20-30 houses are covered, the rest get intermittant or no connection due to the high-frequencies used), calculate the cost of tower construction, land-leasing and power over a 20 year period to the cost of laying fibre from the tower out to the properties. A lot of my customers are requesting satellite rather than the NBN mobile in rural areas because it just does not work well. In built up areas digital high frequency signals work better but you will always be limited by the connection/bandwidth algorithms too.

    Japan just got 53tbs over a single fibre line, if the tech becomes commercial all we would have to do is change the end-points on full-fibre.

    Unfortunately NBN is a largely politicised piece of junk, just glad I live in Armidale where we are on FTTH and get a good connection. Next time, listen to the techs who have to deal with this stuff on a daily basis.

    it's comparing apples and oranges for sure, except they got actual fruit and we just got peels. the libs gutted the whole thing so hard and expected it to somehow work

Join the discussion!