NBN’s $800 million Optus network might need to be rebuilt

THE $800 million network that the NBN bought off Optus may need to be completely replaced, blowing costs and times out even further.

MALCOLM Turnbull and the NBN have spent $800 million on a network that reports suggest could almost completely needs to be rebuilt.

As part of the Coalition government’s multi-technology National Broadband Network, the government bought Optus’s ageing hybrid fibre-coaxial (HFC) cable network, which was originally rolled out in the 1990s for pay TV, for $800 million.

But leaked documents obtained by Fairfax Mediareveal the government is planning to replace that $800 million network at a cost of an extra $375 million.

The documents claim that the Optus HFC network is “not fit for purpose” and nearing the end of its life, while other parts of it are simply already oversubscribed and wouldn’t be able to deliver on the speeds promised by Mr Turnbull and his government.

These new plans would see the Optus network rebuilt with either Telstra’s HFC or fibre-to-the-node technology, which was originally planned for 38 per cent of the network. On top of the huge cost blowout, which is already expected to be $15 billion over budget, the NBN will be missing the rollout targets of 633,000 premises in 2017 and 2018, which will now have to wait until 2019 at the earliest to be connected.

A lot more cable is going to need to be replaced now.

An initial agreement was made between the NBN and Optus in 2012, where it was approved by the Australian Competition and Consumer Commission under the grounds that the government could gradually decommission Optus’s HFC and replace it with fibre-to-the-premises broadband connections.

The existing network needed upgrades and it was deemed commercially unviable for Optus to do that work and maintain it.

Despite this, the deal was revised in 2015 the government would keep Optus’s HFC network in use and make upgrades where needed for the same $800 million price tag.

Opposition communications spokesman Jason Clare slammed the findings of the document, saying it showed “more evidence of the absolute mess that Malcolm Turnbull has created with his second-rate NBN”.

“It reveals that the Optus HFC network, a key component of Malcolm Turnbull’s second-rate NBN, is in far worse condition than Australians were led to believe and NBN Co is considering overbuilding the network — costing hundreds of millions and meaning hundreds of thousands of Australians will have to wait longer to get the NBN,” Mr Clare said.

Optus said that it always acknowledged the HFC network needed major investment to manage subscriber growth and capacity demand.

A statement from NBN Co said the corporate plan had accounted for the ebbs and flows of the project.

“In order to manage risk NBN regularly prepares for multiple scenarios in the network deployment — the document concerned is part of that ongoing approach of risk mitigation.”

“Nearly 1.5 million homes and businesses can now order an nbn service and nearly 700,000 are connected. In order to manage risk, NBN regularly prepares for multiple scenarios in the network deployment - the document concerned is part of that ongoing approach of risk mitigation.”

However, the NBN would not comment to news.com.au whether or not they will be replacing some or all of the Optus HFC network.