news The National Broadband Network Company has revised its fibre to the premises rollout forecasts dramatically down for the third time in six months, with the company now projecting that only 729,000 premises will be passed by its fibre by the end of June 2014, a little over half of what it was projecting in August 2012.
In the company’s most recently updated formal Corporate Plan, published in August 2012 (PDF), it was projecting that it would have deployed fibre to some 1.3 million premises nationally by the end of June 2014, including both brownfields areas, which are already served by Telstra’s copper network, as well as a small number of greenfields areas, constituting new property developments.
In March this year, NBN Co unexpectedly revised its forecast for the end of June this year. Initially, the company had been forecasting that it would reach some 341,000 premises by that period with its rollout. However, the company at that stage revised its targets down to between 190,000 and 220,000. At the time, NBN Co chief executive Mike Quigley, who has since flagged plans to retire from his role, said the company was “accountable” for the delay, but was disappointed with its failure.
At the time, Quigley also said that what he characterised as a “short-term issue” would not affect the long-term delivery of the NBN. “NBN Co remains on track to deliver fast, affordable and reliable broadband to every Australian by 2021 as set out in our Corporate Plan,” the executive said. NBN Co eventually met the targets it had set in March.
However, since that time, it has been revealed that the company has had to revise its figures for the next year downwards again twice. This week the Financial Review newspaper published a draft copy of NBN Co’s new Corporate Plan (PDF), which, it is believed, was delivered to the then-Labor Federal Government before the election — in draft form.
That version of the Corporate Plan details the fact that by the end of June 2014, NBN Co expected at that stage to have covered just 981,000 premises with its network — a figure 319-odd thousand down from its plan a year ago. And yesterday, new Coalition Communications Minister Malcolm Turnbull said September figures supplied by NBN Co had been revised down even further. The company was now planning to reach just 729,000 premises by the end of June, Turnbull said.
“The NBN Co has recently advised the Government that is proposing to revise its rollout target for premises passed by fibre by 30 June 2014 down by almost half from the forecast made four months ago,” Turnbull and fellow NBN Co shareholder Minister Mathias Cormann said in a statement released yesterday, along with the new Government’s new Statement of Expectations for NBN Co.
In an interview on the ABC’s flagship current affairs show 7:30 last night, Turnbull said he believed NBN Co’s targets had been “essentially political”.
“I don’t think they were ever realistic, to be frank with you,” Turnbull said. “You can take two views, I suppose. You can say they were always unrealistic or some people thought they were, with the benefit of hindsight, naively or over optimistically thought they were realistic. But the fact is they’ve slipped enormously.”
“I mean if you look at the forecast for premises passed by fibre as at June 2014, the end of June 2010 they said there would be 2.7 million premises, in August 2012 they said 1.3 million and then in June they said it would only be 981,000. A figure that [former Communications Minister] Anthony Albanese kept secret. This was in the draft corporate plan that he refused to release, you might remember. And then in their latest forecasts, which is just this month, they’ve said it will be 729,000. So in the space of a few years the forecast has dropped by nearly 75 per cent.”
The Communications Minister acknowledged that deadlines did slip on major projects, but said that in future, he wanted to know “the plain, unvarnished facts” regarding NBN Co’s rollout.
Yesterday, at the release of the Statement of Expectaions, Turnbull and Cormann said a key priority would be to reduce the backlog of 66,000 premises passed by the NBN fibre network which could not currently obtain service. “This includes the majority of apartments, schools and businesses in areas where the fibre network has been rolled out,” the pair said. Alternative technologies such as fibre to the basement may be used to cover the gaps in the existing rollout.
In the Coalition’s new Statement of Expectations for NBN Co (PDF), the pair requested that the company start publishing weekly information on its website indicating the number of premises passed by its network, those premises that are passed but cannot receive a service, and those premises with an active service, for each elements of the NBN network (fixed-line, satellite and wireless). The Coalition ministers also noted that they were seeking advice from NBN Co on longer-term arrangements for improving the transparency of the company’s operations.
The Department of Broadband, Communications and the Digital Economy is also developing a ranking of broadband quality and availability in all ares of Australia.
The news of NBN Co’s third target reduction in six months has the potential to significantly damage the credibility of the company in terms of its rollout pledges. The company has consistently failed to meet its rollout targets over the past four and a half years since it was established in April 2009, with other delays being caused by lengthy negotiations with Telstra and the additions of responsibilities for greenfields environments to its mandate.
Image credit (table): Office of the Communications Minister