NBN puts HFC rollout on hold

Works to fix performance issues

NBN will press pause on its rollout of further hybrid fibre-coaxial (HFC) connections while it works to address poor performance encountered by end users.

NBN CEO Bill Morrow announced today that “effective immediately” it would delay new HFC activations until it can “calibrate a number of processes” and deliver higher quality connections using the technology.

Morrow said that end users with HFC connections had encountered dropouts and that there were also issues encountered when migrating to the new network.

The CEO said that for premises that are slated to be connected using the technology but do not yet have active services there will be a six to nine month delay. (Morrow said that customers that have already placed an order will still be connected, however.)

Morrow said that customers affected by the delay will still be able to access non-NBN telephony and broadband services, either over ADSL or through HFC.

NBN expects to ultimately connect some 3 million premises with HFC. Some 1 million premises were — until today’s announcement — able to order an HFC-based NBN service. There are 375,000 households with active NBN services using HFC connections, and 50,000 premises waiting for activation.

Morrow said there was “no risk at all” of a repeat of September 2016 when NBN largely dumped its plan to use Optus’ HFC-based pay TV infrastructure. The current rollout of the technology is based on Telstra’s HFC infrastructure.

He said he still had faith in HFC describing it as a “wonderful technology” that can deliver high speeds at a low cost.

The CEO said that it was too early to assess whether there would be a financial impact from the decision, but said NBN was still on track to complete the new network in 2020.

“In order to meet a higher level of service quality, NBN Co will be performing advanced network testing and remediation where needed, wholesale connector replacements, signal amplification calibration, and lead-in work as required,” NBN said.

NBN has previously been subject to significant criticism over another of its key fixed-line technologies, fibre to the node.

Telstra to assess impact on revenue

In a statement to the ASX, Telstra said that its FY18 guidance “included an assumption that the nbn rollout would be broadly in accordance with the nbn Corproate Plan 2017.” NBN in August issued an updated corporate plan, the telco noted.

“Telstra will assess the effect of today’s announcement in conjunction with the nbn co Corporate Plan 2018 on its outlook for FY18 and advise the market once that assessment is complete. The delay in the nbn rollout will delay a proportion of the payments to Telstra from nbn into future periods.”

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