When the National Broadband Network (NBN) roll out concludes in 2020, less than a quarter of customers connected via fibre-to-the-node (FTTN) — the cheaper alternative advocated by former communications minister and now prime minister Malcolm Turnbull — will be able to access the networks fastest download speed of 100 Mbps (megabits per second).
Fairfax Media reports that while most other technologies, such as fibre-to-the premises (FTTP), the system originally proposed by Labor when it first launched the project, will be able to offer speeds of 100 Mbps or more to premises by roll out completion according to estimates from the NBN, just 24% of FTTN customers will have access to that speed level.
FTTN uses Telstra’s old copper wire system to deliver NBN from a neigbourhood node to the premises, which also degrades potential speeds the further it has to travel.
The revelations about capacity for FTTN connections comes after Telstra and Optus were forced to offer refunds to customers because their NBN packages could not deliver the speeds they’d been promised.
At the time, an Optus spokesperson blamed the problem on an “underlying NBN copper access issue specifically for fibre-to-the-node and fibre-to-the-basement services”.
An NBN spokeswoman told Fairfax Media that up to 90% of customers connected terrestrially will be able to get speeds of up to 50 Mbps by 2020.
While the vast majority of NBN users are currently subscribing for bottom end speeds of 25 Mbps or less amid debates over the cost of the service, while the NBN announced late last year that it was cutting wholesale prices of faster broadband speeds by up to a quarter this year in a bid to lure customers onto higher tier products.
The NBN will cut the monthly wholesale price of a 50mbps plan cut by 27% to $45, with 2Mbps of bandwidth, while pricing for a 100mbps plan will fall by 10% to $65, with 2.5Mbps capacity included. The discounts will apply for 12 months from the date a user signs up to the new plans. How much of the savings will be passed on to consumers by retailers has yet to be revealed.
But with the roll out due for completion in just three years, and a little over half of Australians now able to access the network, questions over the long-term commercial viability of the government-owned business continue amid speculation that the government will be forced to write down the $50 billion investment, which includes $30 billion in taxpayer funding, as it looks to sell it.
Fairfax has more on the writedown scenarios here.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.