NBN Co won’t use ageing Optus HFC network

NBN Co has scrapped plans to use Optus’s ageing HFC network, instead opting for fibre-to-the-distribution point.

NBN workers roll out cabling.

The company building the NBN has scrapped its plans to use Optus’s ageing HFC network, instead opting to deploy fibre-to-the-distribution point (FTTdp) technology to up to 700,000 homes.

FTTdp — sometimes referred to as ‘fibre to the driveway’ — runs fibre cables to the front of a customer’s home or business and uses the last few meters of existing copper cable to deliver super-fast broadband services.

NBN’s chief network engineering officer Peter Ryan said NBN Co was exercising its options under a revised agreement signed with Optus in December 2014 to use and acquire parts of the Optus HFC network services only if it chose to do so.

Documents leaked last year revealed Optus’s HFC network was plagued by a number of issues including old equipment, high “noise” interference on the line affecting speeds, oversubscribed nodes that require splitting, network complexity, and the fact Optus’ cable modem termination systems couldn’t support NBN capacity.

Optus’s HFC network would remain the property of its parent company SingTel, Mr Ryan said.

“We have tested FTTdp over the last year and we’re confident we can now deploy the technology in areas where it makes better sense from a customer experience, deployment efficiency and cost perspective,” Mr Ryan said.

“This includes premises in the FTTN footprint that have too high a cost per premises and premises served solely by the legacy Optus HFC footprint that are yet to be made ready for service.

“When we consider the advancements we’ve made in FTTdp, combined with the up-to-date learnings we have on the Optus HFC network, NBN Co has confirmed it will deploy FTTdp in those areas where the use of the Optus HFC network was planned, with the exception of the already launched network in Redcliffe, Queensland.”

NBN Co CEO Bill Morrow had previously flagged the FTTdp numbers may rise depending on economic viability.

“We think there are about 300,000 homes that will be candidates for FTTdp. We need to validate those assumptions so we are about a year away from doing a wider scale deployment of this technology. But it is coming,” Mr Morrow told The Australian earlier this year.

“If over time it proves that we can do FTTdp even cheaper or we find neighbourhoods that are better served by FTTdp, that number will go up.”

According to NBN estimates, the network’s main technology component — FTTN — costs $2300 per premise while FTTdp costs $2700 per premise.

Mr Ryan said HFC remained a “highly valued” part of NBN’s multi-technology deployment, and the decision to ramp up the FTTdp deployment reflected the company’s technology-agnostic approach as pursued under Malcolm Turnbull.

“In balancing the requirements to convert Optus’s current network architecture and design to be NBN-ready, and the opportunity to introduce FTTdp, makes the new technology compelling in these selected areas,” he said.

In a statement welcoming the decision, Optus said “FTTdp provides design flexibility for rollouts in HFC network areas, and should minimise customer disruption in areas where the current Optus and Telstra HFC networks overlap.” Areas that couldn’t be connected to FTTN would also benefit, Optus said.

NBN Co originally planned to connect 4 million homes to the HFC cable networks it acquired from Telstra and Optus but cost blowouts due to required upgrades forced it to slash the number to between 2.5 million and 3.2 million homes under the company’s 2017 corporate plan.