NBN Co speeds rollout to tackle cherry picking

Dylan Bushell-Embling
16 Apr 2014

Australia's NBN Co plans to increase its spending on rolling out the National Broadband Network to lucrative urban areas, to counter expected infrastructure competition from the private sector.

The state-owned company plans to speed up the launch of FTTP and FTTB services for apartments and office blocks, Fairfax Mediareported.

NBN Co is feeling pressure to act quickly to stop private operators from threatening the NBN's profitability.

ISP TPG Telecom has announced a plan to build its own FTTB network connecting around 500,000 apartments and office blocks in dense urban areas.

Because private operators will be free to only roll out fiber to the most profitable areas - compared to the nationwide NBN rollout - NBN Co fears that they will be able to undercut retail NBN services on prices, potentially destroying the business case for the network.

The previous Labor government in fact introduced anti-cherry picking legislation aimed at preventing this situation, but TPG plans to exploit a loophole allowing extensions of under 1km to existing networks.

NBN Co fears that if TPG can exploit this loophole, any other ISPs could do so, capturing the most lucrative parts of the market. Speeding the NBN rollout to urban areas serves as an attempt to prevent this scenario.

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