High FTTP costs inevitable in Australia: nbn co

The high cost of deploying fibre-to-the-premise (FTTP) to individual premises in Australia is an inevitable consequence of the nation’s geographically dispersed population, according to nbn co’s chief network engineering officer, Peter Ryan.

The company has recently faced criticism over its costs for laying FTTP compared to the per-premise costs of other operators in the developed market.

But in a blog post, Ryan said that if a list is compiled of locations where it would be most expensive to deploy an FTTP network “Australia is always going to be very close to the top of that list”.

He said leading FTTP markets such as Hong Kong have been able to deploy fibre at a comparably very low cost per premise due to the fact that most of the population lives in large apartment buildings in very high density urban areas.

“The stats tell their own story, Singapore — which has a national FTTP network — has population density of 7987 people per square kilometre and Hong Kong 6442 people per square kilometre. Here in Australia we have the 14th-lowest population density in the world, with fewer than three people per square kilometre,” Ryan said.

“There is simply no getting away from the fact that delivering universal FTTP in Australia is always going to be more expensive than almost anywhere else in the world. Conditions here do not lend themselves to a cheap and fast FTTP deployment to every single premise and that is not going to change.”

Australia’s dispersed population has led to connection costs for individual premises running into the tens of thousands of dollars “and these are not isolated cases by any means”, Ryan said.

Unlike private operators in markets such as the US, nbn co also does not have the option of refusing to deliver an FTTP connection if it is not economical to do so.

In addition, while other nationwide fibre deployments have kept costs down by relying on aerial fibre deployments over telegraph poles and installing fibre in shallow ditches on individual properties, nbn co is deploying fibre over Telstra’s extensive network of underground ducting.

This leaves the cables less exposed to damage, but also drives up costs, with nbn co on average spending $1500 deploying cable from pit to premises, $2150 for the local distribution network component and a further $750 in duct leasing costs to Telstra. Ryan said this latter cost is “a component few other operators would have to build into their cost per premise”.

Ryan said that operators around the world are facing the same issues, noting that Google Fiber abandoned its plans to build FTTP networks across America in favour of deploying fixed wireless networks instead after finding it is expensive and time consuming to deploy FTTP.

Likewise, the French government has recently had to revise its plan of deploying FTTP nationwide by 2030 due to the costs and time involved.

“That’s why the French Auditor General has now recommended that the country move away from its all-FTTP goal and instead embrace a ‘mix of technologies’ to deliver better broadband to every premise in the country by 2030,” Ryan said.

“This is exactly why it also makes sense for us to be flexible in our approach and have a range of technologies at our disposal and we then use those technologies in the area most suitable. By doing this we can not only get end users connected much faster but we can also do so at a lower cost.”

Image credit: ©stock.adobe.com/au/alxpin

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