Australia to Review Fiber Network With Rollout 50% Behind Target

Australia will review its national fiber network as the rollout falls 50 percent behind targets and the new Communications Minister sought resignations from all directors of the government-backed company building the project.

NBN Co.’s target for the number of buildings with fiber broadband connections by the end of June 2014 has been revised down by half, Communications Minister Malcolm Turnbull told reporters in Sydney today. About 1.3 million premises would have had access to the network by that date, according to the company’s most recent corporate plan.

Turnbull has previously criticized the project, estimated to cost about A$44 billion ($41 billion) by the previous government, for missed targets and cost overruns. About 33,600 homes and businesses were using the fiber network at the end of June, with 207,500 premises connected to the cables, compared to a target of more than 2 million connections in NBN Co.’s earlier 2011 corporate plan.

“The NBN rollout has to date repeatedly missed its targets,” he said. The government wants to “get the best result for taxpayers and consumers as soon as possible.”

Turnbull said all but one of the seven-person board had tendered their resignations.

The move “should not be regarded as any criticism of any of the directors”, Turnbull said, and was intended to give the government flexibility in remaking the board given its different policy for the network.

Cheaper Plan

The strategic review won’t start until the new board is in place, he said.

Turnbull and Prime Minister Tony Abbott have promised to connect all households to high-speed Internet by 2016 for A$30 billion, saving money by running the fiber only as far as junction boxes as much as a kilometer from homes and covering the remaining distance using existing copper wires.

The previous government’s plan would have run fiber direct to almost every home and workplace in the country.

Construction work on the network will continue while a planned 60-day review of the project is carried out, and companies building the infrastructure will continue work “well into 2014”, Turnbull said.

The revised target, which will give less than 1 million homes and businesses access to the network in June 2014, compares to a 2.7 million forecast in NBN Co.’s 2011 corporate plan. The original plan called for 12 million fiber connections by the project’s completion in 2021.

The network now being proposed would give every household download speeds of 25 megabits per second by 2016, according to the government.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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