The strategic review into NBN Co is out, estimating an extra $11.5 billion in costs and to have nine out of 10 Australians accessing 50 Mbps by 2019.
The coalition government will break its promise of delivering 25 megabits per second (Mbps) broadband to all Australians by 2016, and says the final cost will be 40 per cent higher than predicted.
A strategic review into the national broadband network (NBN) shows that 43 per cent of premises will have access to the promised download speeds by 2016.
Federal Communications Minister Malcolm Turnbull puts the broken promise down to the coalition not having access in opposition to the full details of network builder NBN Co.
“We were really confident that goal could be achieved, but we overestimated, clearly, the ability of the NBN Co to deliver,” he said on Thursday.
Labor’s communications spokesman Jason Clare said that, after three months in office, the government was breaking promises “left, right and centre”.
“This will hang like an albatross around Malcolm Turnbull’s neck,” he said.
The review released on Thursday forecasts that by 2019 speeds of up to 100 Mbps will be available to more than two-thirds of Australians, and nine out of 10 people will have speeds exceeding 50 Mbps.
The predicted peak funding is now $41 billion, up from the $29.5 billion the coalition estimated in April.
However, Mr Turnbull said the coalition remained committed to limiting its equity investment in NBN Co to $29.5 billion, with the excess cost to be made up through debt.
Positive cash flow from NBN Co to pay off that debt is estimated to emerge in 2022.
On the other hand, the review stated that the current plan set up under Labor would miss its 2021 target by three years, and cost $73 billion – up from $43 billion – to complete.
Labor aimed to connect 93 per cent of home and business by 2021 to fibre-to-the-premise (FTTP), which can reach speeds of up to 1000 Mbps through optical fibre cables.
The review has instead recommended implementing a multi-technology approach.
This includes continuing to roll out FTTP for 20 to 26 per cent of premises until 2018, mainly in high revenue potential areas such as business districts.
The slower fibre-to-the-node (FTTN), or boxes on street corners, model, which will rely on ageing copper wires, will be rolled out to 44 per cent to 50 per cent of premises under the review.
Hybrid fibre-coaxial (HFC) has been recommended for 30 per cent of premises, with speeds of up to 100 Mbps currently possible, as well as upgrades into the future.
Fixed wireless and satellite is also estimated to serve six per cent of premises, and NBN Co will explore the use of aerial FTTP deployment through powerlines, as suggested by the Tasmanian government.
Mr Turnbull says the monthly retail price to access the NBN will be cheaper if the recommendations are adopted because the project will cost less than Labor’s plan.
Meanwhile, it was also announced on Thursday that Vodafone Australia boss Bill Morrow will take over as chief executive of NBN Co next year, replacing Mike Quigley.