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NBN Premises Switch options

NBN Co releases new Technology Choice Policy

Kenneth Tsang Leave a comment

NBN Co is set to give consumers more choice over the technology being rolled out. They have released their new Technology Choice Policy which will allow individuals or whole areas to switch from NBN Co’s designated technology under the Multi-Technology Mix model to an alternative technology type at a cost to the consumer.

This is a much anticipated component of the revised rollout policy after NBN Co’s switch to the Multi-Technology Mix — allowing consumers to purchase a “fibre-on-demand” product. However, there are no details or estimates on the expected cost of upgrade build.

As part of the application and network design process, NBN Co will charge individuals $600 (ex GST), and at least $1,000 (ex GST) for a quote to network switch over a large area. According to the NBN Co website, the final costs for each the different technology upgrade “can range from a few thousand dollars to tens of thousands of dollars” for an individual premises switch and “can range from tens of thousands of dollars to several millions of dollars” for a switch of an entire service area.

While absent from the actual policy document, NBN Co’s Chief Customer Officer John Simon indicated to ZDNet’s Josh Taylor that the fee for the application will be refunded if the extension goes ahead.

NBN Premises Switch options
Pricing details show the application and design costs for the Technology Choice Policy

At launch, NBN Co will allow applications to switch an entire area from FTTB, FTTN, Fixed Wireless or Satellite to a full fibre network (FTTP). Starting April, individuals be able to make an application to switch from FTTB to FTTP; and following from that, the switch from FTTN to FTTP will be available in July 2015.

However, the possibility of a HFC to FTTP upgrade is still being considered and developed by NBN Co.

 

The new policy, released this week on Friday*, replaces the existing Network Extension Program which enabled individuals or communities who were slated for Fixed Wireless or Satellite to upgrade to Fibre to the Premises or Fixed Wireless (respectively).

Clarification: Policy was intended to be released on Friday by NBN Co, but was made available on its website on Thursday night. Because NBN Co did intend to release it on Friday, the date when this policy was “released” will still say “Friday” in this post

 

Inside an NBN node at Umina Beach

Phone-only consumers to pay more in FTTN and HFC

Kenneth Tsang 1 Comment

(analysis) NBN Co has confirmed that they will force phone-only customers within their Fibre to the Node and HFC footprints off the existing PSTN service delivered over the current copper network from Telstra exchanges. Like the current migration of customers in the Fibre to the Premises footprint, all customers in the FTTN and HFC footprint will also need to migrate to the NBN network within 18 months after an area is NBN Ready for Service.

However, unlike the FTTP technology where NBN Co will install a Network Termination Device (NTD) at end users’ homes, customers or retail services providers are expected to provide the termination modem to connect to the NBN network. This leaves phone-only customers in an uncertain situation because phone signals are not natively transmitted over the FTTN or HFC networks.

Extra cost to consumers

NBN Co currently charges a minimum of $24.00 per month for its Access Virtual Circuit (similar to line rental, it allows service providers to access the data and voice ports on a customers’ premises). In addition to that, there are overhead costs for service providers to operate, connect and rent phone numbers.

However, in the FTTN or HFC footprint, customers will have to likely purchase (or have subsidised by service providers) a VDSL or cable modem with Voice Over IP (VOIP) functionality to make calls. With VDSL modems with in-built VOIP costing around $200 today, phone-only users in the FTTN footprint will likely have higher up-front costs or ongoing repayment costs compared with their FTTP footprint counterparts who can simply plug their existing phones into the NBN Co provided NTD. This would be a similar situation in the HFC footprint.

This means that consumers who don’t wish to access the Internet, yet retain a fixed-line phone connection, could potentially face up to $200 more up-front — or $8.30 per month on a 24 month contract.

No Backup Battery

It also creates further uncertainty for priority assist customers, or customers with medical or security alarms. The typical modems made available to consumers will unlikely have an uninterrupted power supply (UPS, also known as backup battery) in the event of a power outage. While the street-side nodes used by NBN Co in the FTTN network will have backup batteries, the customer’s modem will be unable to connect in the event of a power outage without a backup battery as well.

Elderly customers or customers with security or medical alarms may need to purchase an additional UPS to ensure their connection remains during a power outage, bearing further costs onto customers who only want a phone service.

FTTx & HFC will drive up mobile-only use

With these additional cost barriers likely to hit consumers in the FTTB/N and HFC footprints, phone-only consumers may be encouraged to abandon the fixed-like service and take up a mobile phone only service instead. With the increasing bandwidth made available using LTE and 3G technologies, transmitting voice and making phone calls over the cellular network has become cheaper than ever.

This may be even more problematic for NBN Co’s business case which used to assume that roughly 7% of the population will have mobile-only services. With the existing 7% of customers representing at least $18 million per year in lost potential revenue, NBN Co may need to find alternative avenues to make additional revenue.