Coalition's NBN cheaper? No says MyNetFone CEO

Rene Sugo said while the Coalition's NBN could be delivered cheaper than the Federal Government's NBN, using the existing copper network will result in higher costs or service issues

MyNetFone's CEO has rebuked Malcolm Turnbull's claims the Coalition could deliver a cheaper model for the National Broadband Network (NBN), stating the cost of maintaining the copper network will add to a fibre-to-the-node (FTTN) deployment.

While Rene Sugo conceded the shadow minister for communications and broadband's approach of using fibre-to-the-node would be cheaper, he has called on the Coalition to provide analysis and research on what speeds would be guaranteed on a FTTN network.

"There are lots of issues around using the copper which will add cost or degrade the level of service that will be delivered by a fibre-to-the-node solution," he told Computerworld Australia.

Turnbull has consistently stated the Coalition could deliver a cheaper NBN – and sooner - than the one currently being rolled out by the Federal Government via fibre-to-the-node (FTTN), which would result in cheaper prices for consumers as NBN Co would not need as high a return on investment.

"Fibre-to-the-node, around the world, costs between one quarter and one third of fibre-to-the-premises. That is the experience in North America and Europe. And in Australia with very high labor costs the differential would likely be even more," he said in a blog post.

Turnbull did not state how much cheaper the Coalition could deliver the NBN.

Not only will a FTTN deployment also result in higher long-term costs, Sugo also said the quality and validity of Australia’s copper network, which provides the last mile between the network node and premises, is one of the biggest challenges for ISPs at the moment.

“The copper is very old. In some areas there isn’t enough of it. In other areas it’s really bad quality and if it rains you get service issues. Sometimes you get people up the road from one another having totally different speeds available and it’s all because of the copper,” he said.

“I think the reason we need a new NBN is to provide a truly universal service … If you’re looking at relying on the existing copper network you’re going to inherent all of the quality issues that we have today. I don’t see a way around it.”

Sugo also cited the availability of the copper network as an additional issue, with companies like Telstra using pair gain technology which allows the telco to provide two phones on one piece of copper.

“Once you have pair gain technology you can’t offer DSL or any form of broadband out of that copper,” Sugo said.

“Telstra’s also using what’s called RIMs, which is a remote module. If there’s a new estate built out in [the] metro surrounding the city, they’ll put a RIM in there. RIMs don’t have 100 per cent capability to offer DSL or broadband.”

Sugo said wireless is also an unviable solution for connecting a large number of premises to the NBN due to spectrum limitations, particularly in high density areas.

“You’ve got to keep in mind if [regional] areas do over populate with houses or apartment blocks you will need to start putting fibre in at some stage in the future,” he said.

“Certainly fibre-to-the-node in a lot of areas around Sydney, Melbourne or [any] capital city where the copper is old, unless they’re planning on replacing the copper, I think they’re going to have problems.”

Turnbull also argued that if technology can deliver broadband requirements to premises at the moment, it makes sense to deploy it now instead of waiting to deliver maximum potential bandwidth. However, Sugo said Australia needs scalable NBN technology which will help the country plan for broadband growth.

“We need technology that is scalable and the beauty about fibre and optics is that it’s almost infinitely scalable. You can use DWDM [dense wave division mulitplexing] technology [and] they’re improving the bitrate on fibre all the time as well so there’s so much technical advancement there,” he said.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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