NBN Co to “rationalise” some access technologies entirely

NBN Co will “actively consider rationalising” the number of access technologies it supports by around 2030, when it will still have seven in use but face growing equipment obsolescence risks.

The company is starting to consider what the next three years of being regulated will look like, publishing a summary publicly late yesterday. [pdf]

The full details of its proposals are expected to be published separately in mid-July.

A key theme of the summary is a desire to be much simpler from a product and retailer interface perspective.

It’s a theme mirrored in other parts of the telecommunications sector, but for NBN Co, it is clear that the ultimate aim is to support fewer access technologies.

“With customer take-up of full fibre services expected to be 70 percent by 2030, NBN Co will actively consider rationalising the number of technologies used… to provide services, which will make it simpler for NBN Co and retail service providers to develop, market and support products and services,” the company wrote.

The fibre-to-the-node (FTTN) footprint’s days are already numbered courtesy of an upgrade program. 

But, according to the summary, there will still be over a million active FTTN services in FY29. 

All seven existing access technologies will still be part of the mix as of FY29.

What the company’s ideal end-state concerning supported access technologies may become clearer in a few weeks. 

But it’s likely the company wants to be completely off FTTN and fibre-to-the-curb (FTTC) at a minimum, due to risks associated with those technology domains.

These risks could increase NBN Co’s costs in the next three years, as a hedge against obsolescence.

“The discontinuation of FTTC/FTTN equipment manufacturing due to significant reductions in global demand may bring forward the timing of equipment purchases or require accelerated network upgrades, resulting in changes to the planned debt levels,” NBN Co said.

“[We] continue to assess the feasibility of reusing FTTN/FTTC equipment from the network as services upgrade to full fibre. 

“Additionally, there is an opportunity to selectively migrate from legacy to new technology to reduce reliance on equipment risk.”

NBN Co is anticipating that customers on wholesale speeds of above 100 Mbps will increase from eight percent at the end of June this year to 48 percent by June 30 2029, as more of its network is fibre.

Technology budget

The summary provides a topline indication of NBN Co’s intended technology spending between FY27 and FY29.

NBN Co is forecasting capital expenditure of $345 million for technology to support service delivery. It defines this as “technology, automation and AI”.

Most of its IT costs are operating expenses. It is forecasting $558 million for “IT and software costs for support, cloud service fees and licenses for corporate applications as well as telecommunications, IT consumables and hardware maintenance” over the three years.

The company is continuing to try to simplify the technology interfaces through which it interacts with internet providers.

Investment will also be put towards “standardising customer and network processes across all technologies, and transitioning to a single real-time view of customer information”, it said.

One point of interest is a direct link between its investments in data, AI and automation and staff costs.

NBN Co is forecasting a 19.2 percent reduction in staff costs – both field force and corporate workers  – to $1.7 billion for FY27 to FY29 compared to the three years prior.

“[We] continue to invest in organisation simplification, data AI and automation and rightsourcing to drive this cost down,” it said.

Service standards

Another eagerly-awaited promise to be tested is an uplift in guaranteed service standards for assurance and other activities on the network.

NBN Co “is proposing to invest about $72 million over five years in new or elevated benchmark service standards,” it said.

These would cover “each part of the customer journey”, it said, although details were scant.

NBN Co has largely delayed substantive changes to service standards until it can convert more of its network to fibre, which is more reliable than other access technologies.