The 1 million people missing out on the NBN

Angus Kidman 13 February 2018 NEWS

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Plus: NBN confirms just how bad congestion problems have been.

NBN Co announced its half-yearly results yesterday, and there were plenty of interesting nuggets of news to be had. For instance, we had confirmation that there's still no timeline for when NBN will begin connecting new cable (HFC) customers again, having stopped new connections back in November because of the need for an "improved experience" (translation: the service was terrible and getting worse).

"It's still too early to be specific on timelines for releasing but we're progressing quickly," NBN Co CEO Bill Morrow said during the results call. Morrow noted that the actual HFC build hasn't stopped, but that's not much comfort if you were originally expecting to have your current service replaced with HFC in the first half of 2018.

Then again, the HFC service might not have been any better. "We could see an increasing number of problems arising and that meant the network wasn't going to deliver the experience expected," Morrow said, noting that dropouts were a particular issue. So the end result? If checking the NBN plans for your address shows that you're supposed to be an HFC, when you can sign up remains very much a mystery.

"Ready for service" and other myths

The HFC delay is also responsible for one of the more interesting examples of NBN doublespeak. As of the end of December, there are 7.1 million premises which are "ready for service", but only 6.1 million that are "ready to connect". What's the difference, and what happens to those 1 million people?

"Ready for service" means that an area is broadly enabled for NBN connections, but that some premises in the area may require further work. "Ready to connect" means that those premises actually can connect.

Given that's the only figure that matters to consumers, why even bother to talk about the "ready for service" numbers? And why call it "ready for service" when customers can't actually receive any service?

The likely answer to that means that NBN Co can boast about build numbers that are much higher. But in terms of measuring an actual network people can use, "ready to connect" is the only relevant number. In other words: 7.1 million is a meaningless figure because even if the NBN had 100% interest levels, there wouldn't be 7.1 million people connected. So don't pay any attention to "ready for service" figures.

Congestion confessions

There was better news on the congestion front. It seems that changes to pricing introduced last year, designed to encourage consumers to sign up for higher-speed plans by making 50/20 plans the same price as 25/5, are already having an impact.

"All signs show that the new wholesale pricing is working well," Morrow said. "We've seen CVC increasing by more than 57% compared to the previous quarter." CVC is a complex concept – check out our detailed explanation if you're curious – but in simple terms the more CVC a provider buys, the less congestion consumers suffer from. Signing up to faster plans also means you're less likely to complain about dropouts.

Prior to the new plans, just 140,000 customers were on 50/20 plans, but that has now grown to 207,000, Morrow said. 50/20 plans also now comprise 30% of new orders, up from 3%. Given that big fish Telstra and Optus didn't announce their own discounted plans until January, those numbers are likely to go up, and NBN Co is predicting 1 million 50/20 connections by June 2018.

Now the problem appears solved, NBN Co has gone public with detail that confirms just how bad congestion issues have been. Prior to the change, customers might suffer as much as 7 hours a week of congestion lowering speeds "down to a fairly serious level", Morrow said, with Friday, Saturday and Sunday nights particularly bad. Since the change, that figure has dropped to less than 30 minutes, he said.

That's a welcome improvement, but note that it doesn't mean congestion issues have disappeared. However, a few minutes a day is a lot better than an hour a day. We'll have to see whether that momentum holds as more customers sign up.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on finder.com.au.

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