‘Delivery failure’: NBN’s $750m upgrade attracts only 100 new customers

An upgrade of NBN Co’s fixed wireless service has so far yielded only an extra 100 customers, new figures reveal, despite promising to benefit ‘thousands of homes and businesses’.

A $750m upgrade of NBN’s fixed wireless network as so far yield only 100 customers.

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A $750m upgrade of NBN Co’s fixed wireless service has so far yielded only an extra 100 customers, new figures reveal, despite promising to benefit “thousands of homes and businesses” and inject billions of dollars into the national economy.

The government-owned telco said the upgrade – which was announced in early 2022 and completed at the end of December – would deliver “5G-enabled NBN”, providing faster internet speeds across rural and remote Australia. This would generate up to $6.1bn for regional businesses, NBN said at the time, as it helped catapult the bush into the digital era.

But the opposition and rival telco TPG, owner of Vodafone, have questioned that investment following the service’s slow adoption, saying the millions of dollars in levies and subsidies NBN Co receives every year need to be reconsidered or scrapped.

Taxpayers contributed $480m to the wireless upgrade – via a federal government funding boost – while NBN Co tipped in $270m. The federal government has also since injected an extra $3bn into the NBN to upgrade homes on the “outdated” copper network as it makes the future of NBN funding an election issue.

The service was pitched as an alternative to NBN Co’s satellite offering, Sky Muster, which has shed more than 20,000 customers in the past two years as more Australians opt for superior connections from competitors such as Elon Musk’s Starlink.

Ellie Sweeney replaced Stephen Rue as NBN Co chief executive late last year.

But the latest market indicators, which the Australian Competition and Consumer Commission released on Wednesday, reveal that NBN added only 100 new customers to its wireless service in the December quarter, with overall numbers rising from 404,014 to 404,114.

And in the 12 months to December, it recorded a decline, with more than 1000 Australians dumping the wireless service. NBN said promotion of the new service was yet to begin and it expected more customers to choose a wireless plan after its “major educational and awareness” efforts ramp up.

But opposition communications spokeswoman Melissa McIntosh said the wireless upgrade was a “shambles” and criticised NBN for imposing two price hikes on Australians in the past year.

“The Albanese Labor government has a track record of delivery failure, and the NBN is a prime example,” Ms McIntosh said.

“The NBN’s wireless business is in a shambles, whilst its satellite business has declined rapidly over the last three years, with 26,000 less customers.

“Yet the government has upped the cost of NBN for struggling families in the middle of a cost-of-living crisis by 14 per cent, with two price hikes in a matter of just eight months.”

Australians have been ditching NBN Co’s Sky Muster satellite service for superior connections from the likes of Elon Musk’s Starlink.

A TPG spokesman called for the abolishment of the Regional Broadband Scheme, a levy the government introduced in 2020 to subsidise NBN Co, which commercial telcos and their customers are forced to pay.

“This is another reason why the anti-competitive and protectionist RBS tax needs to go. NBN competitors and taxpayers contribute millions of dollars every year to subsidise and protect the NBN, but this shows a rethink is urgently needed,” the TPG spokesman said.

NBN Co chief development officer for regional and remote, Gavin Williams, said at the time the $750m upgrade was announced in early 2022 that it would deliver a considerable return on investment.

“Access to fast and reliable broadband plays a vital role in the lives of people across Australia and is critical for the nation’s economy,” he said.

“This investment will also support the regional Australian economy with an additional $6.1bn in regional gross domestic product over 2022 to 2026 financial years.

“For businesses, faster speeds will enhance and expand participation in the global digital economy and benefit from innovative technology such as the Internet of Things and smart farming.”

NBN Co executive Gavin Williams.

Mr Williams said the upgrade would also support remote working. But in the past two years more companies have ordered staff to return to the office rather than work from home, which became popular out of necessity during the pandemic.

Mr Williams has defended the exodus of customers from NBN’s Sky Muster satellite service, telling a Senate committee last year it was “realistic to expect … market shifts” from the arrival of competitors such as Mr Musk’s Starlink. He told senators the wireless upgrade would help counter that threat.

“For our part, the important thing is to ensure we do everything we can to make sure our services are match-fit, and to that end, for our fixed wireless service, we’re upgrading that significantly as part of a commonwealth co-investment, $480m, to lift its average capability, to lift the highest speeds available on that network, so the customers in regional Australia can really take advantage of the sort of economic benefits.”

An NBN spokeswoman said on Wednesday a “major awareness push is under way” to promote the wireless offering now the upgrade has been completed, and NBN Co expected to “see more take-up as customers and retailers become more familiar with the new offerings”.

“With the physical completion of this extensive upgrade program at the end of the December 2024 quarter, around 800,000 homes and businesses in regional Australia now have access to faster speeds and more reliable connectivity than ever before,” she said.

“However, it’s important to note that at the time of the December quarter, we were still deep in the upgrade process, and major educational, awareness and promotional efforts had not yet begun. The focus during that period was on completing the technical work to expand network capacity and increase available speeds.

“The successful completion of the fixed wireless upgrade program at the end of the December quarter marks a significant milestone, delivering greater speed, improved reliability and an enhanced broadband experience for regional communities.”

Originally published as ‘Delivery failure’: NBN’s $750m upgrade attracts only 100 new customers