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Secret figures show full fibre NBN may have cost $10 billion less than claimed

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The NBN is the nation’s biggest infrastructure project, and the debate over whether to roll out a faster full-fibre network or use a cheaper technology mix using fibre and existing pay-TV cables has been one of the defining political debates of the past decade.

The Coalition maintains building a full-fibre network would have been hugely expensive and time-consuming, while Labor says this type of NBN would not have been as costly as claimed and the country has been left with a second-rate network.

The savings estimates form part of previously redacted information in the 2013 review, which found completing a rollout of Labor’s full fibre to a premises or home (FTTP) network would mean a peak cost of $72.6 billion in 2024. A “radically redesigned” FTTP rollout was estimated to cost $64 billion. Switching to a mixed technology plan including FTTP, pay-TV cables and fibre to a node on the street but copper to the home, was estimated to cost $41 billion.

Since it was proposed in 2007, the NBN has remained a contentious issue with Mr Turnbull as opposition communications spokesman at the 2013 election insisting Labor’s FTTP model was needlessly extravagant and unaffordable at a projected off-budget price of $44.9 billion.

The unredacted documents seen by The Sydney Morning Herald and The Age suggest the cost of rolling out a full fibre network to homes and businesses could have been more than $10 billion cheaper than previously claimed by the Coalition. Mr Turnbull has defended his decision to switch to the multi-technology mix in 2014, saying the estimates were reasonable for 2013.

Savings worth $850 to $1150 were estimated to be achievable for each existing home attached with fibre under the radically redesigned plan. These savings included the use of more cost-efficient network architecture and materials worth $300 to $450 per home or business, a further $50 to $100 from cost-efficient construction techniques and $500 to $600 from increased labour productivity.

However, sources with knowledge of the NBN Co’s business operations say cost efficiency improvements were already happening in 2013 and would have been introduced without a radical redesign.

If the lowest level of estimated savings was applied to homes in the existing full fibre rollout at the time, peak funding could have been reduced from $73 billion to about $60 billion. Interest rates associated with the debt were estimated at a relatively high 6.9 per cent by 2024. A further $5 billion to $6 billion in savings may then have been achievable due to lower debt overall and with interest rates below 4 per cent. The present low interest rates were not foreseeable.

There are several factors relying on forecasts in 2013 which have ultimately affected the cost of the network, including the final number of homes that would need to be connected and the rate at which households and businesses would sign up.

Telecommunications consultant Paul Budde said there were “already clear indications” of upcoming cost-reducing improvements in the late-2000s when a full fibre network was being discussed. He said the $10 billion savings figure was “certainly not over the top and on the conservative side”.

Mr Turnbull told the Herald and The Age he was “really proud” of the NBN in “very difficult circumstances”. He had previously argued national broadband infrastructure should have been left in the hands of industry.

“If we had continued with all FTTP, one thing that’s indisputable is that by the beginning of last year, it would have been about half finished with terrible consequences for work-from-home,” he said.

Mr Turnbull said all the assumptions made were “reasonable at the time” and finance costs always depended on interest rates.

In September, NBN Co announced it would spend $4.5 billion over the next two years to provide almost 10 million households and businesses with the option of high-speed fibre connections, in a change of political direction by the Coalition government which outraged Labor.

A spokeswoman for NBN Co said the organisation was “responsible for delivering against the 2016 statement of expectations”.

“This sets out the government’s commitment to ensuring that all Australians have access to broadband as soon as possible and at least cost to taxpayers,” she said.

Labor communications spokeswoman Michelle Rowland has upped her recent attacks over rising costs at the NBN, saying if the Coalition had continued with the Labor policy, the nation would have a “faster and more reliable NBN, at less cost to the Australian taxpayer”.

“The decision to abandon fibre back in 2013 was never about cost. It was always about politics,” she said in a speech last year. “One side had a long-term plan and a technology to deliver it, and the other side felt they had to oppose it.”

Communications Minister Paul Fletcher said when the Coalition was elected in 2013, Labor had connected 51,000 homes, compared to almost 8 million in 2021.

“In September last year, I announced a $4.5 billion NBN network investment plan will give up to 75 per cent of fixed line premises across regional and metropolitan Australia access to ultra-fast broadband by 2023,” he said.

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