ABC News 24 with Greg Jennett > Mitch Fifield, Liberal Senator for Victoria

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16-August-2016

 

Interview with Greg Jennett
ABC News 24
2:30pm
16 August 2016

E & OE

JENNETT:

What we have now is the release of nbn’s year results for the last financial year. An important milestone that allows us to do a full stocktake on the progress of this massive engineering project and to that is the Communications Minister Mitch Fifield. Minister welcome, I think the headline results from nbn are the premises ready for service are ahead of forecast, premises activated and revenue all ahead of the corporate plan. What then of the quality of service, which for many users is the speed. I note that the vast majority of customers are still getting 25 megabits per second tops. Is that good enough? 

FIFIELD:

Well the story today, from the end of financial year results, really is evidence of one of the most dramatic turnarounds in Australian corporate history. nbn, when we came into government, was essentially a failed project. After 4 years, only 51,000 people had hooked up to the nbn; contractors had downed tools in four states, and the previous government had missed their 2013 targets by a million.  

In contrast, as you indicate, nbn has achieved 2.9 million premises ready for service, which is better than the corporate plan objective. 1.1 million Australians are actually hooked up to the nbn. So this is a great story, they’re on track for completion by 2020.

But you raise the issue of speeds. 

Now something interesting that we’re finding is that 83 per cent of people who are nbn customers are purchasing packages of 25 megabits per second (Mbps) or less. So they’re voting with their feet. They're going for the product which meets their needs. But importantly, 25 Mbps is the minimum. What we will have at the end of the rollout is 90 per cent of the fixed line footprint will have speeds of 50 Mbps. And what we’re finding on the fibre to the node network, where you can get speeds of up to 100 Mbps, is that the average is about 70 Mbps. The story on speed is a good one; there’s a range of speeds available but look at what it is that people are actually purchasing.

JENNETT:

Right so when the results tell us that only 18 per cent of people are getting above 25 Mbps, are you saying that is due to choice, not so much engineering?

FIFIELD:

That’s right. If you look at the speed tiers that people are purchasing, it doesn’t really vary that much between fibre to the premises and fibre to the node. People are opting for lower speeds. So we’re building a network that has the capacity to upgrade over time, but it’s been built in a way that meets the needs that people have.

JENNETT:

Now fibre to the premises, just doing the comparison here, is still leading on ready for service indications at 1.3 million, almost double your preferred fibre to the node technology. At what point are you going to see the big pickup and node overtaking fibre to the premises?

FIFIELD:

Now the fibre to the node product was only released in September last year. Fibre to the premises was obviously what the previous government was going with. It was a more developed technology solution. So fibre to the node is really starting to ramp up now. Let me give you an indication for the organisation as a whole: nbn over the course of a typical month is connecting between 60,000 and 70,000 people. That’s more in a single month than the previous government did over 4 years.

JENNETT:

Active connections, are they?

FIFIELD:

Active connections. But the beauty in our approach – and full credit here to Malcolm Turnbull who shifted the nbn from Stephen Conroy’s theological approach to a technological approach – is we pursue what’s called a multi-technology mix. That means that nbn as an organisation is essentially technology agnostic. They will roll out that which will see the nbn get to people soonest and at less cost, whether that be fibre to the premises, fibre to the node, fixed wireless or satellite. And management can vary as better suits the Australian rollout.

JENNETT:

How do you explain this gap – and I think you’ve touched on it already: premises activated is sitting at just over 1 million, and yet those that are ready for service are around 3 million. Why aren’t those, roughly speaking, 2 million customers activating their service?

FIFIELD:

People have a period of time to migrate across to the nbn on the fibre-to-the-node component of the network. After a period of time, their existing service will be removed and they’ll have to switch over to the nbn. But there’s a migration period available, so that accounts for some of the lag. And also people move to a system, move to a network, move to a service as it meets their needs. And people are discovering what the nbn can do. We’ve spent too much time talking about the nbn rollout itself, and not enough about what nbn can actually do. It’s important enabling economic infrastructure and it’s incumbent upon us and nbn as an organisation to talk about what it can do and what the benefits are. The focus, for political reasons, has all been about the means rather than the end.

JENNETT:

Yes, and on spending, $13b in capital spending has gone into this project and at some point in the next few years whether further taxpayers money goes into this or NBN goes off to the market for loans. Are you any clearer which way that will tip, and when that decision will be made? 

FIFIELD:

We are going to cap our equity contributions to nbn at $29.5 billion, and we’ve already given about $20 billion to nbn. The balance of those equity contributions will be made over the next year or so.

And the balance of nbn’s funding requirement will need to be borrowed, and the circumstances and timing of that we’re looking at the moment.

JENNETT:

Alright, now just finally, this is our first interview with you since your re-election and reinstallation into this portfolio. The nbn leaks that dominated the first part of the election campaign – did they form any part of your incoming minister’s brief or are you any clearer about what happens with that, some people are using the word scandal, from here?

FIFIELD:

Well Greg, as you know, I think as everyone knows, as a result of some operational police activity a couple of months back, there is an ongoing police investigation that will reach its conclusion. But what I’m focussed on is rolling out the nbn for all Australians, and also calling the lie of the Australian Labor Party who said that the nbn was off track and was going nowhere fast. It’s bang on track, and Malcolm Turnbull as Communications Minister brought order to bear where there was chaos And Labor’s proposition that they took to the election would actually see the nbn rollout take 2 years longer and cost between $8 billion and $30 billion more. We’ve got a good story to tell and Labor have to stop telling fibs.

JENNETT:

So you remain at arm’s length and in the dark about the operational police investigations?

FIFIELD:

Correct.

JENNETT:

Mitch Fifield thanks for your thoughts today.

FIFIELD:

Thanks Greg.   

[ends]