The value of FTTH to home buyers? At least $5000

Stuart Corner
Sunday, 31 May 2009 12:17

IT Industry - Strategy

The Federal Opposition is trying to score points against the Government by claiming that the cost of mandatory FTTH in new housing developments will be an unwelcome impost on home buyers. The facts, however, suggest otherwise.

The Government has indicated it intends to make the installation of fibre to the premises mandatory in all greenfield housing developments from 1 July 2010, and has just released a consultation paper seeking industry input on the issues raised by such a policy.

Shadow Communications minister, senator Nick Minchin, however has accused the Government of imposing unwanted and unquantified costs on new home buyers. "The Government clearly hasn't thought this through and I find it extraordinary that after announcing this project it is unable to say whether home buyers will bear the cost for the mandated roll out in greenfields estates," Minchin said.

He added: "Greenfield estates...attract large numbers of young first home buyers. Unless the NBN company bears the cost, ultimately it will be these young home buyers who could be out of pocket several thousand dollars."

Minchin made his comments after questioning an officer, Colin Lyons, from the Department of Broadband, Communications and the Digital Economy in a Senate Estimates hearing. Lyons' advice to Minchin was "wait until we have released the discussion paper." Minchin would have done well to heed this advice before trying to score points against the Government.

First of all, the discussion paper notes: "The cost difference [between copper and FTTP] is relatively modest compared to the total value of the house, the life of the investment and when considering the increased functionality of future-proofed FTTP networks.

"The available evidence suggests the cost differential is in the order of $1500 per premises. At an estimated cost of $2500 per premises, the installation of FTTP would represent less than one percent of the cost of a $350,000 house and land package. The total cost per premises is comparable to, or even lower than, the cost of other utilities installed in greenfield estates."


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