NBN: Fibre Construction costs.

The NBN Co Corporate Plan, 06-Aug-2012, has a headline Capital Expenditure, CapEx, figure of $37.4B from 2011 to 2021.

The individuals contracts to construct the Fibre network are "Commercial In-Confidence" and quite rightly not published.

In "Exhibit 9-7: Forecast Capital Expenditure" there is a line-item for "Fibre and Transit" networks, (vs "Fixed Wireless and Satellite" and "Other CapEx").
Adding the yearly CapEx for "F&T" gives: $28,498MM, or $28.5B.

A 2011 Business Spectator piece on the NBN Fibre Construction contracts starts with:

The protracted year-long tender process for construction of the $12 billion fibre component of the national broadband network collapsed amid acrimony two months ago because the 14 short-listed companies couldn’t provide acceptable terms and pricing.

This is echoed in another finance and investment piece published at the same time in TMT Finance:

This strategy came to a head around the estimated $12 billion fibre construction contracts, originally to have been signed by 31 December 2010, but still not completed at the date of this article.  NBN Co has indicated that the reason for the delay is that the 14 construction companies involved in the tender had failed to offer appropriate pricing. 

From 2011 to 2012 Corporate Plans, there was a 3.9% increase in total CapEx, suggesting that Fibre Construction costs are still approximately $12B.

The "Transit Networks" connect the Fibre Distribution Hubs (FDH's) back to Fibre Serving Areas and ultimately to the 121 Points of Interconnect, PoI's, where the Retail Service Providers interconnection with the NBN.

There was a change in strategy in the 2012 Corporate Plan: all Premises passed in a Fibre Deployment would have lead-in connections made then, not later on an as-needed basis.

Additionally to the fibre, each premise connected has an Optical Network Termination Devices, ONT's or NTD's, which I presume wouldn't be installed until a connection is activated.

Analysis:

Comparing another NBN technology, such as FTTN, to GPON/FTTP, the same costs need to be compared:

• The total project is $37.4B, the fixed connection component is $26.8B, the rest being for Fixed Wireless (4G mobile), Satellite and some other CapEx (unidentified here, possibly IT systems etc).
• The $26.8B must be used for comparisons.
• The Fibre Connection cost is approximately $12B, with nearly $17B in other network costs.
• Most, if not all, of these network costs will be common between an FTTN and GPON network:
• ONT/NTD's are needed at every premise, no matter what Access Network technology is employed. These are provided by the Network provider and will be approximately the same cost as they need to provide the same interfaces and functionality.
• Dual-interface, copper and optical, ONT/NTD's will be more expensive that single interface devices. They might be used to allow simple upgrades later on.
• The Transit Network is needed for all technologies.
• The 121 PoI's are immutable in all designs: they've been mandated by the regulator, the ACCC.
• There is a difference in equipment between GPON and VDSL FTTN.
• The major cost difference is the 148,000 km "covered road distance" for Fibre, most or all of the estimated $12B for "Fibre Construction"
• 25%, around 35,000 km will be aerial cable with lower CapEx but higher maintenance.
• Trenching costs have been estimated by others at $45-$55 per metre, or ~$50,000/km.
• Trenching 110,000 km would cost 110 * $50M, or $5-6B.
• 100mm conduits are laid down streets, with 50 mm lead-in and cross-street conduits and a standard fibre connection and Optical Splitter box shared between adjacent premises.
• The standard NBN 12-fibre "ribbon" is then laid in the conduit with pull-through rope.
• FTTN networks have a major capital cost of installing 350,000 nodes in the field

It is quite possible that installing nodes may be three to four times cheaper than buried Fibre Construction:

• Which would be $4B vs $12B, a potential savings of $8B.
• Only a fraction of the total budget of $37.4B
• But must also be offset by other costs, like copper circuit "conditioning" related specifically to an FTTN.