news Shadow Communications Minister Malcolm Turnbull has labelled news that NBN Co has signed up some 4,000 customers to its networks as “a bitter jest”, pointing out that the company’s own corporate plan planned for 35,000 customers to be using the infrastructure by June 2011, and 137,000 by June 2012.
On the public holiday yesterday, a number of media outlets published a story which appeared to be sourced from wires service AAP, which reported NBN Co internal statistics as showing that its network had been rolled out past 18,200 premises nationally, with some 2,300 customers having signed up to the fibre infrastructure and some 1,700 more having started to use the satellite service available in rural areas. The network will hit another 500,000 premises in 2012.
However, Turnbull issued a statement yesterday criticising NBN Co for its efforts so far.
“According to NBN Co’s 2011-2013 Corporate Plan [PDF] there were meant to be 35,000 customers using NBN’s fibre network in June 2011 and 137,000 using it by June 2012,” Turnbull wrote. “Today’s announcement that only 2300 households are now connected to NBN fibre (and another 1700 to its satellite service) despite more than a billion dollars already ploughed into this vastly expensive project yet again confirms Labor’s inability to manage money or execute policy.”
Turnbull stated that Labor had held power in the Federal Government for four years, but had managed to improve broadband for at most 4,000 Australian households, despite “their flamboyant rhetoric and extravagant promises”.
“It says a lot about the NBN Co’s real feelings about this policy failure that they chose the New Year’s public holiday, January 2, to issue the press release boasting (or was it confessing) to this policy failure,” the Liberal MP added. “Today’s announcement would be comical except that the joke, the bitter jest, is on the Australian taxpayer and Internet user who is reminded once again of how the NBN Co is failing to deliver very fast broadband quickly and affordably.”
Turnbull’s statement that NBN Co’s corporate plan calls for some 35,000 customers to have been connected to its network by June 2011 is correct, although that figure refers to customers who had been connected to fibre in greenfields areas which NBN Co might not have necessarily built itself. The 137,000 figure is mentioned in NBN Co’s corporate plan, but it is not clear what the make-up of that figure is.
In terms of its own network build, NBN Co’s corporate plan does not specify a target for June 2011 for customers to be actively connected to its network, while for June 2012 that target is some 10,000 customers on its new fibre network (and more on satellite and wireless) — although the company had planned for a further 92,000 to be connected to greenfields networks which it may not necessarily build itself. These customers — who may be using infrastructure which NBN Co has acquired from other companies in housing estates, for example — may make up the majority of the 137,000 customers which Turnbull is referring to.
NBN Co’s real immediate targets, as defined in its corporate plan, appear to based on a 2013 timeframe, which is when the next Federal Election is currently slated to be held. At that point, the company aims to have infrastructure covering some 1.7 million premises in total, with some 570,000 premises having signed up for a service.
I think Turnbull and much of the rest of the media are jumping the gun on NBN Co here.
Sure, the company is definitely behind its own targets. It looks like right now NBN Co is mainly lagging in what it calls fibre to the premises greenfields BOT area, where it may acquire fibre owned by other companies for its own use. However, the figures from that area may primarily be ‘on paper’ figures, in that customers in those areas (such as those in new housing estates) may sometimes already have fibre but not yet been formally transferred onto “the NBN”.
In addition, there is just no way that anyone could have accurately predicted the complexity of the NBN rollout process. I’ve seen the size of the contracts which NBN Co had to sign with its suppliers, and they are massive. I’m not surprised that key negotiations for the company have dragged out over the past year or so, and there will continue to be other delays. To my mind, NBN Co has largely done a stellar job of navigating its way as speedily as possible through that minefield, and I personally consider the rollout broadly on track. It has not yet been significantly delayed by any normal standard held by the telecommunications and technology sectors.
NBN Co’s real test — as its corporate plan makes clear — relates to its 2013 targets. The company simply must massively accelerate its rollout throughout 2012 or risk facing oblivion at the next Federal Election, probably to be held in 2013. For NBN Co, 2012 is absolutely the year of delivery, and I’m sure the company will be working its butt off over the next 12 months to ensure the continued survival of the project.
One last quick message for Malcolm Turnbull: Negative, much? As we’ve pointed out several times recently, the Coalition’s alternative NBN policy needs to be fleshed out before we can take it seriously as a policy option. If 2012 is the year of delivery for Labor’s NBN policy, 2012 must be the year that the Coalition publishes the full details of its own alternative plan, or risk losing all credibility in the portfolio.