In a long and drawn-out blog post, Morrow said today that comparing the rollouts in the two countries was like comparing apples and oranges. First, he said, the delivery model differed in that the main telco in New Zealand, Telecom NZ, was split into retail (Spark) and wholesale (Chorus) arms.
Chorus retained ownership of infrastructure and was doing most of the work for building fibre networks. This, Morrow said, meant Chorus could use all existing assets to build the fibre network without paying a cent.
In Australia, the NBN Co, which was set up as a government company, had no network assets; it had to pay Telstra for these assets.
Another difference was that when New Zealand started building a fibre network, it already had a fibre-to-the-node network in place. This meant that much of the feeder fibre from the exchange to street corner cabinets was already in place, "meaning far less work was required to go from FttN to FttP with Chorus taking fibre only a few hundred metres in most cases".
Bill Morrow: 'Don't compare us with New Zealand.'
In Australia, the network was being built from scratch and NBN Co had to take fibre an average of 2.5 kilometres from the exchange to a user's residence.
The same factor meant that the rollout was cheaper in New Zealand. And while there had been much talk about Chorus reducing its FttP delivery costs over the last few years, this was because it had been forced to start the fibre rollout in more expensive areas and then move to cheaper areas, Morrow claimed.
The cost was also claimed to be lower because of the method of delivery. Chorus delivered a significant portion of the fibre network aerially; NBN Co could do this for only 15% of premises. Morrow added that even in non-aerial locations, Chorus could use many other ways to reach the premises.
"If the lead-in conduit is blocked, they can run fibre ducting down fence-lines or even micro-trench the fibre across lawns," he claimed,.
But the NBN Co had to build most of its lead-in through underground conduits, meaning the cost was much higher, sometimes well above $20,000.
Morrow also cited the forced disconnection as a point of difference: in Australia, residences have 18 months to switch after being declared NBN-ready. Businesses have three years.
On the negative side, this meant that only 40% of the connected premises in New Zealand had switched to fibre whereas in Australia the take-up rate was about 75%. But this allowed Chorus to keep premises, which were difficult to connect to fibre, on the old network until the problem was sorted out.
The relative size of the two countries was also cited by the NBN chief as a reason why the two rollouts could not be compared. Additionally, in Australia, fibre had to be deployed to 93% of the residents while in New Zealand the model called for deployment to about 75% of the country.
"NBN Co has to deploy fixed-broadband networks in places like regional Tasmania that in New Zealand are currently served by fixed wireless services – this is a crucial fact to bear in mind when trying to compare what is being done in New Zealand to what is being done here in Australia," Morrow said.
"It is interesting to note that Chorus anticipate that their costs to deliver FTTP to regional areas of New Zealand will increase by NZ$600 from current costs."
He also cited the connectivity virtual circuit cost as a point of difference, one that made the NBN Co's network more expensive to the end user. In New Zealand, there is no such cost, with only an access charge being levied based on wholesale speed.
"As can be seen, comparing Chorus to NBN Co is like comparing apples to oranges. We are confident we are managing our costs efficiently and comparing Chorus to NBN Co is interesting, but ultimately, not particularly helpful," Morrow said.