Summary: Despite an AU$37.4 billion price tag, NBN Co could save money in the long run by using fibre instead of the ageing copper network or an FTTN model, according to analyst firm BIS Shrapnel.
The National Broadband Network (NBN) can shave up to AU$700 million per year off its telecommunications infrastructure maintenance costs once fibre replaces the copper network, according to analyst firm BIS Shrapnel.
According to the latest corporate plan by NBN Co, the NBN will now cost AU$37.4 billion, with a scheduled completion date of June 2012. During the roll-out, Telstra's national copper network will be progressively decommissioned, with customers to be migrated to the fibre network.
The Coalition has long been critical of the NBN, claiming that Australians don't need such a high-speed network, and that a fibre-to-the-node (FTTN) network that keeps copper for the last mile is a cheaper alternative to fibre to the premises (FTTP).
However, according to BIS Shrapnel's "Maintenance in Australia 2012 to 2017" report, the NBN will dramatically lower maintenance costs for the country's telecommunications infrastructure, bringing in long-term benefits.
BIS Shrapnel senior manager of infrastructure and mining Adrian Hart has labelled the NBN a "game changer for maintenance in the telecoms sector".
"While it will allow for much higher levels of voice and data traffic, the technological superiority of optic fibre over Australia's ageing fixed-line copper network is estimated to reduce industry maintenance costs by between AU$600 million to AU$700 million per annum once fully deployed," he said in a statement.
Telecommunications infrastructure-maintenance activity is set to decline from AU$2 billion at around 2015 to AU$1.3 billion per year by 2025 if the NBN goes ahead, according to the report. The savings would be lost if the NBN is delayed further or scrapped altogether.
Telstra doesn't release figures on maintaining its copper network, so BIS Shrapnel deduced the costs mainly through a survey of contractors.
"A lot of the maintenance work is basically maintaining a large workforce to deal with faults and other issues as they arise," Hart told ZDNet Australia. "Through the survey, we discussed issues that would apply to reactive maintenance under the NBN's fibre-style network.
"We arrived at estimates that it is substantially less than the reactive maintenance required under a copper network."
Problems with the copper network are tied to its difficulty in dealing with water and ageing.
Should the Coalition come into power at the next election and decide to go with an FTTN model for the NBN, the savings in maintenance costs wouldn't be nearly as significant.
"We didn't do a specific scenario on FTTN, but if you do have a FTTN network, you will have to maintain a workforce to deal with the fibre and the last portion of copper," Hark said. "You'll never completely remove yourself from the copper issue.
"It will still be reliant on maintaining the last mile and as a consequence the network will always have that susceptibility in it."