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NBN chief executive Bill Morrow said slow speeds were not due to NBN's CVC charges to ISPs. Illustration: David Rowe
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by Paul Smith

National Broadband Network chief executive Bill Morrow has rejected claims his company will never be able to deliver sufficiently high speed services without writing off ambitious commercial return targets, saying its quarterly numbers demonstrated the project was in good health.
Mr Morrow was presenting a third-quarter progress update, which showed NBN was largely tracking in line with its previously flagged revenue and rollout targets, with customers signing up at a rate of 6500 a day.
He was responding to claims made by telecommunications industry insiders led by entrepreneur Bevan Slattery, who recently said early NBN customers were experiencing slow speeds because the government-owned company needed to overcharge internet service providers for capacity in order to hit its financial metrics.
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Bill Morrow said customer sign-ups were ahead of targets, with more than 2.14 million users. Daniel Munoz
Thursday's numbers showed that during the quarter the number of homes able to order an NBN service passed 4 million and Mr Morrow said that number had advanced to about 4.8 million in the first six weeks of the final quarter. He said customer sign-ups were also tracking ahead of targets, with more than 2.14 million active users and revenue more than doubling from this time last year to $262 million.
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But numerous early NBN customers have complained about speeds that are barely distinguishable from what they used to get on ADSL, and consumer groups have expressed concerns about plans advertising "up to" speeds, which are never reached.
The results showed that 81 per cent of customers have signed up to the two lowest speed tiers that max out at 25 Mbps downloads and 5Mbps uploads, and Mr Morrow denied that slow speeds were being created by its so-called connectivity virtual circuit (CVC) charges making higher speed tiers unaffordable.
Technical issues

He said there were a wide range of reasons why a consumer may experience a slower than expected connection, which included technical problems at both a home, the ISP level or the NBN itself. He suggested ISPs were being disingenuous by suggesting that problems would be solved if NBN charged them less.

"It gets really complex and the end user doesn't really care who is at fault, they just want their service to work properly," Mr Morrow said.
"I don't believe the price of the CVC has anything to do with the experience the end user is having and we have a lot of evidence against this. We know RSPs (retail service providers) want a cheaper price, but I want a cheaper price from the managed services that we buy from the other telco companies in the nation as well, but that is not what is driving any experience issues for them."
On Thursday afternoon Telstra moved to address its customers' concerns about the speeds they are getting via the NBN with a web page set up to explain the factors that contributed to their broadband performance.
The telco's retail chief Kevin Russell confirmed that a "small number" of its customers had been paying for higher speed NBN packages than their connections could handle, and said Telstra was actively participating in an industry-wide conversation, coordinated by the Australian Competition and Consumer Commission, about NBN speed guidance and measurement.

Speed performance

"It is clear that helping Australian consumers and businesses understand NBN speed performance requires a coordinated industry response. We need to work together to agree a consistent way to present information so Australians can make informed choices," Mr Russell said.
Meanwhile, Mr Morrow moved to deflect other concerns raised about the future viability of the NBN's business model, following the decisions by TPG Telecom and Vodafone Hutchison Australia to spend more than $1.5 billion securing broad reaching mobile spectrum.
The NBN has an annual revenue target of $4 billion by 2020, but the increasing speed of mobile networks heading towards 5G, combined with more generous data allowances, has led to some suggesting that many Australian households will choose not to pay for any fixed line internet.

"We think an eclectic approach to many networks providing a service to the nation is going to be a good thing overall for the country and we don't think it will harm NBN in terms of its current business model projections," Mr Morrow said.
"We have accounted for a degree of infrastructure competition coming in against the business model. As you look at 5G and other evolution of technology, we are constantly evaluating what it means in terms of the most attractive high margin areas in the country ... we keep our eye on it and right now we don't see it as a threat to the current business plan."


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