Friday, 16 February 2018 05:21

Network expert says NBN Co's business model is broken Featured

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A prominent network expert and frequent commentator on the national broadband network has described NBN Co's half-yearly results as a "train wreck" and said that there is nothing that can be done to get the company back on the rails.

Writing in InnovationsAus.com, Mark Gregory, associate professor in network engineering at RMIT, said that, increasingly, statements that were made by NBN Co "about performance and progress are little more than fodder for the joke of the day".

Gregory (below, right) has been a critic of the NBN's multi-technology mix rollout which was adopted after the Coalition Government, under Tony Abbott, came to power in 2013. The plan has been kept in place after Malcolm Turnbull shafted Abbott in late 2015 and took over as prime minister.

Pointing to the fact that the NBN Co chief executive Bill Morrow had admitted that the company would miss its long-term target revenue target of $52 per use, Gregory said this goal was still one of the key targets for 2020.

Citing Morrow's quote to The Australian — where he said “NBN Co would have to revise its target of hitting average revenue per user of $52 by 2021, saying the move was needed to accommodate recent changes made to NBN Co’s wholesale pricing structure", — Gregory said this was not the first time that Morrow had indicated the company would fail to reach financial targets and rollout deadlines by 2020.

mark gregory vertGregory said the NBN Co's statement that it would provide "greater focus on customer experience" was an indication there would be more delays in the rollout while the company tried to tackle the huge volume of customer complaints.

"In the seven years since the NBN rollout commenced, ARPU has moved from about $40 per customer per month to the $44 per customer per month announced in the half-year 2018 results," Gregory said.

"In the next 2½ years, NBN Co would have us believe that it aims to boost this figure to $52 per customer per month."

He said that this may have been possible if NBN Co had stuck with the original plan to roll out fibre to the home with its lower maintenance and operational costs, serving as a base for "5G everywhere".

Pointing out that a recent survey had indicated that about 30% of customers would move to wireless broadband by 2040, Gregory said if even 5% did so, it would be a serious threat to the NBN Co's bottom line.

"NBN Co’s business model is broken, and the half year 2018 results is yet another carefully crafted document that hides the underlying problems facing NBN Co," he wrote.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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