Telstra response to nbn co announcement on HFC rollout changes

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    Monday 27 November 2017 – Telstra noted an announcement from nbn co today that it would cease sales
    on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017.
    Telstra’s FY18 guidance to the market included an assumption that the nbn rollout would be broadly in
    accordance with the nbn Corporate Plan 2017. nbn co subsequently issued its Corporate Plan 2018 on 31
    August 2017.
    Telstra will assess the effect of today’s announcement in conjunction with the nbn co Corporate Plan 2018
    on its outlook for FY18 and advise the market once that assessment is complete. The delay in the nbn
    rollout will delay a proportion of the payments to Telstra from nbn into future periods.
    Telstra acknowledges nbn co.’s core priority to protect the customer experience and will continue to work
    with nbn co on this goal. nbn co has stated that it remains confident that its long term corporate plan can be
    met to connect eight million homes by 2020, including three million through HFC services.
    Telstra will keep impacted customers informed and discuss disconnection obligations with nbn co and the
    Australian Consumer and Competition Commission to minimise customer impact during this period.

    courtesy of Bell Direct
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    Millions of broadband consumers expecting to have the NBN connected through their existing pay tv or internet cables are going to have to wait up to an additional nine months while technical issues are sorted out.

    NBN chief executive Bill Morrow announced on Monday that the process to connect customers on the hybrid fibre coaxial (HFC) network - usually where the premises already has a pay tv service - would be "paused".

    He said the delay was necessary after a "minority" of the 370,000 customers connected in this way had experienced dropouts.

    The NBN will still work to connect the 50,000 homes that were in the queue for service and any orders in the system through to December 11.

    "Every one thereafter is likely to see a delay ... in the beginning [this delay] is a six to nine-month average," Mr Morrow said at a press conference on Monday.

    The NBN had originally planned to connect 4 million homes to HFC cable networks acquired from Telstra and Optus, but this was significantly reduced in 2016. About 3 million households are eventually expected to be connected to the HFC network.

    It is one of five types of fixed-line connections used by the NBN and is selected where an existing pay TV or cable network can be used to make the final part of the connection to a premises.

    Telstra said it was assessing any effect the delay might have on its outlook for fiscal 2018, as its guidance had relied on the assumption that the rollout would be in line with NBN's 2017 corporate plan.

    About 3 million households are eventually expected to be connected to the HFC network.

    The delay would impact the proportion of payments to Telstra from NBN into future periods.

    "Telstra will keep impacted customers informed and discuss disconnection obligations with NBN Co and the Australian Competition and Consumer Commission to minimise customer impact during this period," it said.

    ..
    Chief executive Bill Morrow on Monday said NBN had decided to take a "pause" to address processes and ensure better service for future and existing NBN users.
    Mr Morrow said HFC had had a higher number of issues than other NBN technologies but reported dropouts had been "small". He was unable to provide a specific number.

    Dropouts in the evening were of particular concern, with the issues due to spectrum interference. Affected areas, both within the existing rollout locations and those not yet declared ready for service, would undergo works to improve the service.

    "We have to take far more radical action to ensure people get the experience they deserve," he said.

    But he said there would be limited impacts for those facing the delay, as they would be able to continue using their existing infrastructure - such as the copper network and their existing phone service.

    "We have examined very closely any negative impact for those yet to connect to our HFC network and we don't believe there is any," he said.

    "For those yet to connect, they'll have a better experience when going through the process of connecting to the HFC network."

    Despite the delays, he said NBN was confident it would meet its 2020 deadline of 8 million homes having access to the NBN.

    The NBN Co website will be updated for consumers to check for any change to the timing of their move onto the network.

    Shadow communications spokeswoman Michelle Rowland described the HFC move as a "debacle".

    "Is NBN seriously telling the Australian taxpayer they have been deploying a HFC network that is not fit for purpose?" she said.

    "Today's announcement raises more questions than answers."

    courtesy of SMH

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    Telstra's chief executive Andrew Penn said the company's HFC cables worked just fine until the NBN made "technology changes" to them and also admitted the company cannot tell customers how fast their NBN internet will be until after it is connected.

    Key points:

    Telstra says HFC "currently delivering a great experience" for its customers, NBN changes causing "issues"
    CEO Andrew Penn says Telstra will soon advise the market on the financial impact of NBN HFC rollout delay
    Mr Penn says 5G mobile is not a complete substitute for the NBN but will "impact it as a business"
    Speaking to The Business presenter Elysse Morgan during an American Chamber of Commerce in Australia (AmCham) lunch, Mr Penn said he supported NBN Co's decision to delay its rollout on the Hybrid Fibre Coaxial (HFC) network by six to nine months while it resolves technical problems leading to internet dropouts.

    However, Mr Penn emphasised that those problems were not inherent in the cable, much of which was installed by Telstra.

    "That is the same cable that currently provides internet services for Telstra's customers and also for Foxtel pay TV services and for those services it is absolutely fine and delivering a great experience," he said.

    "It's in the process of NBN taking it and making whatever technology changes they are making to it where they have some issues."

    It is not just HFC that is causing problems for NBN Co and telcos using its network, with several internet service providers compensating customers for slower-than-advertised speeds.

    Renegotiating your NBN plan?

    Before you get on the phone, here's what you need to know about your connection and what can be done about it.
    Telstra's boss said his company cannot accurately tell customers how fast their speeds will be until after they are connected.

    "NBN cannot advise on what the actual speed is that's available in your home until it actually gets connected," Mr Penn said.

    Pressed on how Telstra would advertise speeds to customers, Mr Penn said it promised a baseline and then offered upgraded speeds at an extra cost for customers whose connection could support it.

    "Because NBN cannot tell us until they actually connect a home what speed they can provide to that particular home," he explained.

    5G mobile won't make the NBN 'redundant completely'

    Despite the repeated problems with slower than anticipated internet speeds, dropouts and higher costs, Mr Penn said he did not expect that enough customers would abandon the NBN for mobile connections to make it redundant.

    "I think you will see some customers on the fixed network decide to just go mobile only, but ultimately the laws of physics apply, and if you were to carry the same amount of data on a mobile network at a national level that is currently carried on a fixed network there would have to be such a very, very significant investment in mobile capacity," he said.

    "There's no doubt that 5G and mobile will play a bigger role, my point is that it won't eliminate the NBN completely.
    Your NBN questions answered

    What packages should you get? What if speeds aren't what you expected? RN's Download This Show puts your questions to NBNCo's Kelly Stevens.
    "It'll probably impact it as a business, because they'll probably ultimately have a smaller proportion of customers that they're serving, but it won't render it redundant completely."

    As for the financial impact, Mr Penn said Telstra is still calculating the short-term cost of the latest delay in the NBN rollout and will update the market in the coming days, including whether there would be any further cut to the company's planned dividend.

    "Financially, there's net-net no long term change, because this affects the timing of when we receive the various different payments but, as you can imagine, there's quite a lot of complexity in the relationship between NBN and Telstra financially," he said.

    courtesy of ABC News
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