PricewaterhouseCoopers - Business

Are You Happy With Your Internet Speed?

Many have been very disappointed in Australia’s National Broadband Network (NBN). Less than 20 percent have internet speeds greater than 15 megabits per second when NBN promised 100 megabits per second.

What’s going on?

People aren’t happy:

  • As an article in the Western Australian reports: “Poor NBN service is a threat to WA lives and business.” (Chief Information Officer Giles Nunis).
  • The Department of Health and the Department of Fire and Emergency Services have complained about long delays in delivery, confusion and a lack of NBN consultants for troubleshooting.
  • WA’s Acting Minister for Innovation Simone McGurk said the economy and business development were being compromised because of NBN’s poor service.
  • A survey of 958 NBN users shows that more than one-third (34 percent) would switch back to their pre-NBN service in a flash if they had the option.

A Federal inquiry is reviewing rollout delays and whether the NBN was competitive against similar high-speed internet services around the world. And according to a WA submission, Australia is 50th under a world-ranking system, which puts us behind Bulgaria and Latvia!

There’s Competition Now Which Is Good News For Those In Melbourne

With the regulatory decision by the ACCC in 2017, smaller companies can now provide cost-based services to some of the largest networks. This means that NBN has some viable competitors.

These companies and others are working to provide services in Melbourne and give us an option other than NBN:

  • Lightning Broadband uses microwave links to connect businesses and homes. They can deliver 100Mbps of upload and download speeds. This is faster than NBN’s Tier 100 at 30Mbps upload, and 90Mbps download speeds.
  • DGtek is another company offering full fibre alternative services. Their Gigabit Passive Optical Networks runs through denser populations of inner Melbourne. DGteck also offers free service to government organisations like schools and hospitals.
  • In addition, NBN Co has to compete with rapidly advancing mobile technologies. Telstra and Optus are also going to be providing 5G service in 2019. This new wireless technology could be a better choice for NBN customers.

Why Is NBN Service So Slow?

NBN says the problem lies with internet service providers (ISPs) that aren’t purchasing enough bandwidth for their customers. They believe that this is what’s causing congestion and slow speeds.

In the meantime, the ISPs like Telstra, Optus and TPG have been highly critical of the high costs levied against them by NBN.

While the NBN Co. and ISPs are pointing the finger at each other, some blame the speed problems on the government. They mandated that NBN achieve financial stability and replenish government accounts for the money spent on the rollout.

Will NBN Ever Provide What They Promised?

In a statement to, an NBN spokesperson said:

“NBN CO’s April 2018 monthly dashboard shows we are now installing equipment right the first time in 91% of cases (up from 84% in April 2017), we are now meeting agreed timeframes with telcos for connections 93% of the time (up from 87% 12 months ago), and we are now resolving 87% of faults with telcos within agreed timeframes (up from 60% 12 months ago).”

But, despite this, it seems like IT’s all going from bad to worse for the National Broadband Network.

Standard & Poor’s new report deems the network unviable.  They say it’s not likely that they’ll be able to gain a return on the $50 billion invested in the project.

The report explains:

“The Australian government established the National Broadband Network (NBN) with two key policy objectives: to “bridge the digital divide” between metropolitan and regional areas and industry reform via the structural separation of Telstra Corp. Ltd., the former government-owned fixed-line monopoly.

It is likely that the government will substantially achieve these policy objectives, albeit at an enormous cost to taxpayers, subscribers, and incumbent telecommunications providers… We believe it is getting harder for the Government to stand behind the presupposition that NBN Co. will generate a commercial return on investment…

In our view, NBN Co.’s forecast take-up will be hard to achieve without a step-change to its wholesale pricing model. The company forecasts overall market take-up of between 73% and 75%. Any shortfall in NBN Co.’s revenue target raises the prospect of a writedown and additional government funding to support the company, potentially in the form of debt relief or direct subsidies.”

Plus, with the rise of 5G mobile services people are now abandoning fixed-line internet connections. While it looks like the NBN Co will complete the rollout across Australia by 2020, the quality of service we end up with remains under a cloud.

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