The NBN just put one of the most profitable parts of its business on hold over continued service problems

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The NBN has just canned the roll-out of high-speed broadband via the old Pay TV network as it struggles to deal with reliability issues.

The organisation is putting a temporary halt to the rollout of Hybrid Coaxial-Fibre (HFC) “effective immediately”, and anyone set to receive it now faces delays of between six and nine months before they’ll be connected to the NBN, although the company will still process current orders for another fortnight.

“This pause will be in effect until incremental field work is undertaken to raise the quality of service for end users,” the company said in a statement, acknowledging that “too many were not having the experience they deserve when getting connected and some were not experiencing the full potential of the network”.

NBN Co. will tackle problems for existing users, who have faced regular dropouts, before turning its attention to areas not yet declared “ready to connect”.

“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,” the company said.

NBN chief Bill Morrow. (Source: NBN)

Chief Executive Bill Morrow said that despite the delay, he remained confident that the NBN will meet its goal of connections to eight million Australian premises by 2020.

“While the good news is that we are working on a better experience for the internet providers and end users, the improvement efforts will take additional time and therefore a delay of schedule will occur for most of the remaining HFC premises that have yet to switch to services on the NBN access network,” he said.

Morrow said there was “no risk at all” of the HFC network, which uses Telstra’s Foxtel cables, being scrapped. The NBN paid $800 million for the former Optus HFC network in 2011, but scrapped its use because it was in such poor condition.

“This technology is an important part of NBN Co’s technology mix,” he said, adding that the frequency band the NBN used was part of the technical problems.

Morrow said: “This is a deliberate change to demonstrate NBN Co’s focus on putting the customer experience as a priority over all else”.

The company says its currently adding an average of nearly 80,000 new premises monthly, with a target of three million connections under the current plan. Nearly one million premises are ready to connect and 370,000 have switched on, but reliability has been an issue for users — a fact acknowledged properly by the NBN for the first time today.

It also hits the government-owned company’s bottom line, because its business plan expects HFC to deliver the business the most revenue from residential users.

The announcement also has financial implications for Telstra, which told the ASX in a statement that: “The delay in the NBN rollout will delay a proportion of the payments to Telstra from NBN into future periods.”

Telstra said it “will assess the effect of today’s announcement in conjunction with the NBN Corporate Plan 2018 on its outlook for FY18 and advise the market once that assessment is complete”.

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