Crystal ball gazing? Politics?
AFR claims NBN Co will miss 2014 targets



blog Just how far out ahead is NBN Co able to predict the progress of its network rollout? Quite far, according to the Financial Review newspaper, which this morning published a front page article claiming it had seen internal projections that already stated NBN Co would miss its June 2014 rollout targets. The newspaper reports (we recommend you click here for the full article):

“Leaked internal forecasts seen by The Australian Financial Review indicate NBN Co now expects to have 855,935 existing homes and businesses ready to connect to the fibre network by June 2014. This is 273,065 fewer than the company forecast it would reach in the latest corporate plan, released in August last year.”

Asked about the issue, a NBN Co spokesperson told Delimiter:

“We don’t recognise the number. But we’ve never shied away from the fact there are challenges inherent in any major infrastructure project, not least one of the scale and complexity of the NBN. Issues such as the insufficient mobilisation of some contractors have been flagged for a long time.

As we said in March, we expect to recover this delay incrementally. If contractors don’t perform we will change them. If other issues arise, such as Telstra’s remediation halt, we will take action address them too. We remain confident the build will be completed by 2021 “

From your writer’s perspective, it seems a little futile trying to predict the progress of the NBN rollout a year out. The situation with the rollout at the moment appears to be continually in flux, with some contractors such as Syntheo quitting the NBN rollout altogether, but others such as Downer EDI stepping up. It may be that while some contractors are slower to deliver on their NBN obligations than expected, others will be able to get the work done more quickly than expected. It particularly seems likely that contractors such as SA Power Networks in South Australia, which have large existing workforces capable with infrastructure work, will be able to get up to speed with the NBN quickly.

You also have to wonder at the AFR’s motivations in publishing this kind of story, especially, running as it did, on the AFR’s front page. The article’s authors, David Ramli and James Hutchinson, have broken some major NBN stories recently and are generally very ethical journalists. But is there really a point to running a story in August 2013 about NBN Co not meeting its June 2014 targets? Or is there some motivation to this report which is related to the Federal Election campaign? It’s hard to know for sure; and perhaps that’s much of the problem with Australia’s media landscape at the moment. It’s getting increasingly hard to know what or who to believe.

Image credit: NBN Co


  1. Is the AFR aware there is an election in a month, which could drastically alter everything with a change of government?

    Oh of course they are, how silly of me… obviously


  2. Actually, I am sure they didn’t mean to, but the graph of the rollout progress is pretty good. It broadly follows the rollout rate increases required, and it is offset by a few months, which were already know of the 3 month delay. Seems to be going quite well, if you don’t keep harping back to initial projected figures.

  3. “Or is there some motivation to this report which is related to the Federal Election campaign?”

    Making an educated guess, I’ll say yes.

    Blog entry just needs more reference to the AFR’s consistent anti-NBN campaigning in recent history, I think.

  4. I looked at the actual numbers they reported for contracts and they don’t add up either (in terms of them saying “we’ve heard they’re higher than previous”.

    I don’t see what the point in an article saying in almost an entire YEARS time from now, they won’t meet predictions. It’s been difficult for NBNCo. to predict more than a few months in advance where they will be up to accurately….how will they predict a year away with new contractors having just come onboard??

    I think this is, frankly, plain politicising of the NBN for the sake of the Election. It may not be unethical, but it should still be unacceptable. If NBNCo. are mismanaging the project, it should be reported. But pretending they’re doing so by either reporting numbers that don’t exist or assuming they aren’t going to change in a year, for the sake of a story during the election, is just plain wrong.

  5. “You also have to wonder at the AFR’s motivations in publishing this kind of story, especially, running as it did, on the AFR’s front page. ”

    Indeed. Especially when we are told by NBNCo that “NBN Co meets revised end of yea fibre rollout target.”

    So where or how did the discrepancy arise?

    Ah bingo! Ramli and Hutchinson have used the projected roll out targets from the Corporate Plan. Not the revised targets as given by NBN Co earlier this year. As a result the reporters are judging NBN Co on making up for that shortfall in one year. If they had taken the revision into account, then the targets and results would have been starting from approximately the same position.

    While the previous short fall and the difficulties of making up the same in such a short period is referenced in the article, no mention is made of the revised targets. As such it presents a skewed perception of how the roll out is proceeding. Such a basic error can only be described as careless or deliberately disingenuous.

    So perhaps Ramli and Hutchinson could review their graph and perceptions. And even more relevantly, the article header. Is NBN Co on track to meet it’s Revised Targets in 2014?

  6. According to most articles reported on the delimiter, all negative predictions on the NBN are considered as part of a conspiracy.

    Yet time and time again, the NBN fails to meet targets, and costs go higher. Still, we look for any scarrack of information that clouds any comment on the NBN being a poor project.

    I mean, really, do we salivate for FTTP so much that we would have it at any cost?

    • @Chris

      The costs have risen due to changes in scope of the project. Would you expect your house to cost the same if you had to add a balcony by law?

      This is useless speculation this far out from June 2014 and nothing but politicizing for the sake of it. There is no possible way the AFR could HOPE to know what NBNCo. will pass by June next year. There’s nowhere near enough data. And without data, it’s speculation only. Which puts this firmly in the ‘well then what’s the motive for writing it then’ category.

      NBNCo. showed in May their costs were LOWER than they were expecting overall and they still had not used or planned to use any of their $3.6 billion contingency. Even if they use ALL of it, it still won’t cost any more than $37.4 billion. And $3.6 billion is a lot of money to catch up on figures. Even AFR admits they haven’t used it yet. It’s just buried near the bottom.

      • Well, seven tech, I probably don’t have the confidence that you do in the NBN project.

        If the scope has changed whilst the goals of the project have not, then to my mind that means that the original scoping job wasn’t done right. It’s not just scoping issues though, surely. In any respect, this shouldn’t be a any kind of acceptable excuse, and we need to dig deeper.

        The financial review are claiming that they are working from a leaked forecasting document from NBN, so you are doubting that claim? In any regard data, or lack of it, should give rise to speculation on the health of the project, rather than give confidence and reassurance that it’s all running well. That this information remains out of public scrutiny is frustrating and worrying in my eyes.

        I want technology sites like the Delimiter to be looking at things in more depth, not running to conspiracy claims. The Financial Review has good analysts, I’d say that they have a fair few runs on the board for trust.

        • @Chris

          The scope changed because the government changed the laws around Greenfields, the ACCC changed the requirements of the POIs and NBNCo. entered into a contract with Optus to put their HFC customers on the NBN. The first and second cost money NBNCo. had no hope to plan for and the 3rd costs money in the short term for a faster revenue base in the medium term. Scope change on projects as large and complex as this is common and a 7% total change in CAPEX is hardly earth shattering.

          NBNCo. have said they don’t recognise the numbers- I do. From their Corporate Plan last year that hasn’t been updated to account for the problems with Syntheo and Telstra remediation. One NBNCo. coukdve dealt with better and earlier- Syntheo. They have dealt with it now and hopefully will catch up a certain amount. The other was not NBNCo’s fault or problem- Telstra knew of the issue and NBNCo. was assured they would deal with it. They didn’t.

          There is not giant failure here. Are NBNCo. performing 100%? Nope. Are they performing? Yep. They’re passing an average of almost 1200 premises per day over the last month and are meeting monthly targets set in May.

          Delimiter DOES look at things in depth. You’d know that if you read it regularly over the last few years. AFR have form for both correctly predicting some NBN setbacks AND for publishing absolute conjecture that turns out to be bollocks. I’d say they truth of this one is probably half and half- woukdnt surprise me if contract prices are up. NBNCo. have the contingency, why shouldn’t they use some to start catching up? But predicting the premises passed this far out?? That’s total garbage and nothing but politics.

        • Well, the issues slowing down the rollout, in nearly every case, would also apply to any other type of national broadband rollout. Do we move to a alternate rollout that is very likely to use technology that won’t last past it’s completion and will be a money pit, the “white elephant” warn of? I’d rather not. It’s not about speeds offered by either now or for the next 5-10 years, I am sure they would be fine. It’s where do you go in 10 years time. One already handles 10 years time, beyond that it’s very cheap upgrades. The other, it either needs to be replaced (I class G.Fast as replaced, with all the extra nodes needed virtually nothing will remain of the current FTTN hardware).
          If your new commodore is late, do you go out and buy an old one that has a year of life in it for 2/3rds the price, put of the purchase of your new commodore 1 year and blow a wad of cash, or do you put up with the pulsar for another few months? It’s not loving fibre or anything of the sort. It’s not wanting to waste a whole heap of money that is only viable if you ignore data growth. You can point overseas all you like, they their networks are years in advance of ours. They have a useful life for a payback period.

        • I’m going to put this another way Chris. No matter what, we’re getting an NBN one way or the other – FttN or FttP.

          With these reported issues, why wont they happen to a FttN build as well? The issues causing the planning changes are ones that apply equally to both builds, so why would one build be susceptible to them while the other one wasnt?

          These issues include extended negotiations with Telstra, contractors not meeting their agreed goals, and Telstra not having corrected the asbestos issue despite knowing about it for a decade.

          Or to use a stupid example, if you entered a contract to buy a house, but before it settled your state government decreed that you had to pay $10,000 more for a Greedy Govt Tax, how is that your fault?

          Most of the changes so far have been in that category – third party issues outside NBNCo’s control, yet nobody arguing against FttP is willing to debate that point. Are you?

          • Well, I like to debate, just pesky work gets in the way during the day.

            FTTN is similar, certaintly it is less prone to problems as it doesn’t run through quite as many problem areas that occure when digging up streets and connecting to existing dwellings, but it’s likely to have it’s own issues (I think about the have/have nots, and the co-existence with copper).

            However IMO, I think the problems we have had have been due to an overzealous minister, and a party that had a tenuous hold over government being more inclined to hide failures. Now, regardless of who wins this elections or the move to FTTP or FTTN, so long as we have a change of minister, and a less tenuous hold on government, things should be better. Transparency promotes accountability, which in turn promotes success.

            My personal opinion is that FTTN with a user pays system for connect at the P, is perhaps more conservative and not quite as socialist, but provides a better and safer fiscal outcome. A few dollars saved on this project mean less cuts to other parts of the system, and to me we have over-committed ourselves with FTTP, upsetting the balance of where government spend there money.

          • @Chris

            If the NBN affected the Budget, I’d probably agree with you. There are more important spending opportunities in the Budget….but the NBN DOESN’T affect the budget and there is genuinely very little else this money could be spent on. It’s borrowed money to be paid back over time. Name another policy that could do as such? I can’t think of one.

            And yes, we’re still borrowing money for the Budget. Actually considerably MORE than the NBN. So removing the NBN borrowings would make little to no difference to overall debt.

  7. While I intensely distrust just about anything the AFR publishes these days, and the sorely lacking ethical standards in journalism (aka reporting conjecture, personal opinions, and lies as truth without citing sources) – keep up the good fight Renai, you’re still doing a great job – it’s going to be interesting to see if these road bumps and road blocks are as equally reported if the opposition is elected in September.

    I don’t care where the responsibility lies, I just want the truth.

    • The only thing my gut has ever told me is ‘gurgle gurgle hisses oareerrrrrrr!’ I don’t put much stock in its powers of intuition, to be honest.

  8. Lack of knowledge provides fertile ground for speculation.

    The problem with having a long term project is that it provides an easy political target in its early stage. It allows people like MT not to lie but suggest false projected figures. Likewise, the LNP suggesting that Labor has lost 3b a week by averaging the revenue write down over 10 weeks instead of the proper 52 weeks.

  9. Observer said, “Lack of knowledge provides fertile ground for speculation.”

    Turns out that in this case, it’s actually, “Lack of knowledge provides fertile ground for embarrassment.”

    Brownfield Premises Passed
    2014-06 : 867k

    Suspiciously near to the article’s 855,935…

    So where does this discrepancy between these figures and the August 2012 Corporate Plan come from?
    Well, we already know. March 2013’s revision of the rollout timeline, a three month delay due to contractor issues.
    Add maybe two months to that due to Telstra pausing remediation due to asbestos issues (which wouldn’t necessarily apply to every site, so it shouldn’t be a two month delay across the entire project).

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