The future of the NBN; one year to completion

As we start 2019/20, the 2020 end of the NBN rollout is now very close. The weekly NBN progress report shows 8.1M brownfields premises are Ready to Connect (of total 9.8M), and overall 5.5M premises are connected. So now, our thinking turns to what next after the rollout is complete.

Jeremy Segrott, Flickr (CC-BY)

There will still be:
- getting all the ADSL network shut down,
- getting as many premises as possible on to the NBN, not least in trying to find the right combinations of price and service to suit the diversity of Australian households
- trying to earn a profit from the completed network, and lastly
- thinking about what next.

Three data points, I came across this week, give pause for the what next question.

1. NZ quarterly report of their NBN; the UFB;
While NBN reaches 5.5M activated premises (about 47.5%), Chorus in its 2018 Annual Report advises that their activations have risen from 35% to 45% (p.1). Across the whole of NZ, UFB Quarterly Report shows their activations include 8% on 1Gbps (64,000 connections), and 6.5% on 200Mbps (49,000 connections), with the remaining 85% (645,000 connections) on 100Mbps or less.

What next for NBN includes when to activate 1Gbps services, and at what price.
The broadbandcompare.co.nz website, shows NZ services can get 1Gbps service for about $100NZD per month, with unlimited data, 12mth contract, and $150 for a modem/router. If NZ can only get 10% of connections onto gigabit at $100 per month, then don't expect Australia to reach 10% gigabit unless it is priced affordably and competitively. That is, at $600 per month for gigabit, expect only low single digit percentage household uptake. There may be more interest from businesses at this price.

NBN says 50% of the network will be gigabit compatible, including HFC, FTTC and FTTP. With Gigabit worldwide activated in 2017, Speedtest reports only around 400,000 users. Australia will soon have 4M gigabit-capable NBN premises. But whether they will use gigabit will depend on need and price - hence the value of gigabit.

Chorus (the wholesaler) in their 2019 half-year presentation, say their gigabit charges are $60 per month for Residential and $75 per month for Business connections

2. Speedtest compares Australia, Saudi Arabia and Ireland
While the analysis of the three countries was not that interesting, a graph of Australia's broadband was very interesting. Speedtest provided a comparison of AU broadband speeds in 2018 and 2019 speeds in a graph at 5Mbps intervals. Their testing shows no measureable  usage over 100Mbps. Each 1% equates to about 100,000 households. There are obvious NBN peaks just under 50Mbps and 100Mbps,  and obvious gains in those peaks between 2018 and 2019 (see the Data).

The graph shows under 25Mbps falling from 70% in 2018 to 50% in 2019. In the same time average speed increases from 25Mbps to 30Mbps. If all the under 25Mbps were to be removed, then the average for Australian would be around 50Mbps. This does not take account of underperforming NBN services such as congested fixed wireless.

This data and graph shows Australia is quickly improving. But compared to the top 20 nations who are averaging close to 100Mbps, we are well behind. Not until gigabit takes hold will the Australian average leap forward. The NZ UFB (per the 2019 Q1 report) averages around 170Mbps with the 8% gigabit having a big impact on lifting the average.

3. OECD compares member countries by broadband speed, including per cent of connections over 100Mbps.
OECD data (xls)  on broadband speeds for 2018 has Australia on 0% of connections over 100Mbps. This puts Australia, next to Greece at the bottom of the OECD. In total about 70M connections over 100Mbps are noted across 37 countries. The US has about 30M of these connections (about 10 per 100 people). The next biggest countries being Germany (4.9M), Italy (4.6M), UK (4.3M) and Spain (4.0M), at either 15% (DE, UK) or 25% (IT, ES) of broadband connections. By percentage the most over 100Mbps connections are Switzerland (84%), Sweden( 67%), Portugal (63%) and Belgium (52%), but in total these countries only have about 11M total connections over 100Mbps, about 2-3M each country.

Fixed Broadband - OECD 2018 - Fast (<100), Slow (<25) per 100 people

There is also comparative data (archive.org | xls) from 2016, so it is possible to see how fast people are adding over 100Mbps connections. And now I also retrieved 2014 data from the OECD Digital Economy Outlook 2015 (Broadband speed data (xls); Figure 2.26, p.109).
The graph and underlying data and calculations are available at:
Ferrers, R and OECD. (2019): How fast is Australia's broadband (vs OECD) - 2018? figshare. Dataset. Online at: https://doi.org/10.6084/m9.figshare.8116079.v2 This data was posted in response to NBN's report on their recalculation of NBN in the world speed of Broadband race.