FTTN set to overtake FTTP as NBN rollout continues

‘Multi-technology mix’ becomes a reality

Figures released by NBN as part of its financial results for the first half of FY17 reveal that fibre to the node (FTTN) is set to finally overtake fibre to the premises (FTTP).

Although after the Coalition’s 2013 federal election victory the official policy for the NBN rollout shifted away from an all-fibre network (outside of areas served by satellite and fixed wireless) to a ‘multi-technology mix’ (MTM), FTTP has continued to be the most widely used fixed-line technology — until now.

At the end of 2015, FTTP was used to connect almost 1.16 million premises to the network — compared to just 124,000 FTTN connections. But by the end of December last year, FTTP was used to hook up 1.45 million premises — while 1.3 million were connected with FTTN and 159,000 were connected with hybrid fibre-coaxial (HFC). In total, at the end of 2016 some 3.8 million premises were able to order an NBN service (that figure has since grown to more than 4 million).

HFC only saw its commercial launch on the network in July 2016. FTTN was formally launched in September 2015.

NBN announced late last year that it will use an additional fixed-line technology: Fibre to the curb (FTTC). FTTC is due to launch in 2018 and is expected to connect some 700,000 premises. NBN in November signed an agreement with NetComm Wireless for the supply of distribution point units (DPUs) that will be used in the FTTC roll out.

FTTC will be used in areas where previously it was expected that Optus’ HFC assets would be employed. However, NBN said in September that it would largely ditch the use of Optus HFC infrastructure due to a higher than expected cost per premise.

Although the MTM is now very much a reality for the network, for the six months ending 31 December 2016, FTTP still delivered the lion’s share of revenue for NBN.

The company today reported $173 million in revenue from FTTP, followed by $122 million from network charges (such as its CVC capacity charge). Revenue from HFC was $1 million and from FTTN was $49 million. (Fixed wireless revenue for the half was $22 million and satellite $8 million).

All up, NBN’s revenue of $403 million for the half represented a 146 per cent increase on the first half of FY16. Life to date capex grew to $16.4 billion (up 49 per cent on $11.1 billion at the end of 2016). Operating expenses also grew to $858 million, up from $644 million.

The company ended the half with negative EBITDA of $1 billion — up from negative $688 million at the end of 2015. Removing subscriber costs — payments to Telstra and Optus for migrating their customers to the new network — results in an adjusted EBITDA of negative $455 million for the half. The company reported a net loss after tax of $1.8 billion for the half.

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