NBN Co hopes for enterprise saviour after $2 billion blowout

NBN Co's offer to retail service providers last December of 50 megabits per second download connectivity for the price of 25 mbps had seen the number of customers on speed plans of 50Mbps or higher increase from 16 per cent in June 2017 to almost 45 per cent.

Mr Rue was confident that people would retain a 50 mbps or higher connection, even as it became more expensive once the NBN Co's offer to wholesalers, knows as 'Focus on 50', expired on October 31.

"When people are getting the quality of service they want at the time they want it, they will want to keep that," Mr Rue told The Australian Financial Review.

However he admitted that much of the forecast growth in average monthly revenue per user from $44 to $51 by 2021-22 would come from NBN Co's relatively new enterprise business.

The one part of the market where it competes head-to-head with other telcos, NBN Co would not provide precise figures on its enterprise penetration but a spokesman said it was currently connecting 20,000 businesses per month. New products like a 1 gigabyte-per-second 'enterprise ethernet' fibre offering are aimed at increasing that number.

The forecast growth in ARPU would be a "challenge" to achieve, said a spokesman for shadow communications minister Michelle Rowland, as it had only increased by $1 in the past two years.

The stall to improve the cable (or HFC) network has put NBN Co way behind its forecast rollout schedule, with 9.7 million premises to be 'ready to connect' by the end of 2018-19, down from the 11.05 million expected in last year's corporate plan.

The completion of the network with 11.6 million premises ready to connect is still scheduled for the end of 2019-20 as per the last corporate plan.

"The NBN is on life support and today's $2 billion cost blowout is nothing short of a disaster," said Ms Rowland.

She called on NBN Co to minimise the amount of fibre to the node (FTTN) deployment wherever feasible, and at a minimum take fibre to the curb (FTTC).

FTTN connections, widely considered inferior to HFC or FTTC, are forecast to remain by the far the largest technology in NBN's mix at its 2020 completion.

Proximity to a node will determine speeds for 4.7 million households, while 2.5 million will have an HFC connection, 1.9 million will have Labor's original conception of a fibre-to-the-premises connection, 1.4 million the FTTC connections which only launched in March, and a further 1 million in regional Australia relying on fixed wireless or satellite connections.

Mr Rue said he was focused on build completion and had no specific plan to ugprade FTTN connections in future.

"But by 2020 we will have provided speeds of at least 25 mbps to everyone and 50mbps or more to 90 per cent of the fixed line footprint, and that is going to have a tremendous impact on the economy," he said.

NBN Co forecasts the National Broadband Network will add $10.4 billion to gross domestic product annually by 2020-21, and will have "enabled" 31,000 extra jobs.

Mr Rue, formerly NBN Co's chef financial officer, did not specifically identify any way in which his strategy would differ from predecessor Bill Morrow.

He said coming into the CEO role two years from build completion, and NBN's emergence as a large network operator, would produce "nuances of style compared to Bill" over time.