NBN Co's fixed-wireless and satellite programs are set to blow out by about $1.4 billion after it was revealed demand for services in remote and rural areas had tripled.
A review of NBN Co’s satellite and fixed-wireless programmes estimated there was demand for the NBN from more than 600,000 families, farms and businesses outside Australia’s cities by 2021 – this is compared to the 230,000 envisaged in NBN Co’s 2012-15 Corporate Plan.
However, NBN Co has confirmed funding requirements for the expanded program are in line with the Strategic Review, despite the near doubling of fixed-wireless footprint to serve 85 per cent more users and the extension of the fibre-to-the-Node network.
NBN co has maintained the cost increase was already included in $41 billion capital expenditure forecast in the review.
As of last week the fixed-wireless network covered 80,868 premises, with 12,859 connected to the NBN. There were 43,652 premises using the NBN Interim Satellite Service.
The Fixed Wireless and Satellite Review follows NBN Co’s Strategic Review of the rollout in the fixed-line footprint, published in December 2013.
Both documents will form key inputs into the company’s new Corporate Plan, to be released later in the year.
The review found the fixed-wireless and satellite programs will cost up to $5.2 billion by 2021 – around a third more than originally anticipated – but contribute just $1 billion in accumulated revenues over the period (versus $200 million), even with the greater take-up rate, according to a company statement.
"This reflects the loss-making nature of serving premises outside the fixed-line network," the statement said.
"These higher cost assumptions align with those made about the non-fixed line footprint in the December 2013 Strategic Review.
"No further changes are necessary to the peak funding requirements should NBN Co decide to implement the recommended approach."
To accommodate the higher take-up, NBN Co will almost double the number of fixed-wireless base stations from 1400 to 2700 to serve 85 per cent more premises.
It will also extend the reach of the Fibre-to-the-Node network to serve the needs of up to 25,000 homes, farms and businesses that had been slated for a fixed-wireless or satellite connection
The company will also secure additional radio spectrum to ensure 80,000 premises located in the urban fringes of cities and other major population centres, such as the Gold Coast hinterland, can receive the fixed-wireless NBN.
However the review censored the amount it would cost NBN Co to buy the spectrum needed to service wireless customers.
NBN Co chief executive, Bill Morrow, said a central aim of the NBN was to ensure all Australians had access to high-speed broadband no matter where they lived or worked so they could participate in the digital economy.
"This comprehensive review sets out a range of options that can help us deliver better broadband to more people more effectively in rural, remote and low-density areas," he said.
“In order to meet the higher-than-expected demand for broadband in these areas, the review tells us we need to think smarter about the way we use technology.
"That way we can meet the needs of those Australians who stand to benefit most from fast, affordable and reliable broadband.”