What the NBN upgrade means for rural and regional businesses

The Albanese government has announced a $3 billion funding boost to the NBN. The aim is to upgrade the remaining fibre-to-the-node (FTTN) connections to fibre-to-the-premises (FTTP). With more than half of the planned upgrades targeted at rural and regional areas, here’s what businesses in these communities need to know.

What’s changing with the NBN?

The new NBN upgrade will replace ageing copper networks with fibre connections for around 622,000 additional premises by 2030. FTTP technology offers faster, more reliable internet with speeds of up to 1 Gbps. FTTP far surpasses the capabilities of FTTN, which is further away from premises and has been criticised for years for its instability and declining performance.

For rural and regional businesses, this could mean fewer dropouts and faster data transfers, which are increasingly necessary for online tools, cloud services and connected devices. However, the rollout will be gradual, meaning some businesses might still be waiting years before seeing any benefits.

What will the NBN upgrade cost?

For eligible businesses, the FTTP upgrade will be available at no upfront cost. But there’s a catch — they will have to commit to a higher-speed internet plan. 

While this approach makes sense from a connectivity perspective — it also helps boost NBN Co’s revenue and could place additional financial pressure on small businesses already struggling with rising costs. 

However, the federal government has claimed the upgrades will deliver long-term economic benefits, such as saving households up to $2,500 annually in avoided travel costs. That being said, the immediate effect on business budgets could vary widely.

Will it solve the connectivity gap?

While the announcement promises significant improvements, it’s worth noting that rural and regional areas have historically been underserved when it comes to internet infrastructure. This upgrade is a step forward, but doesn’t fully address the digital divide. For businesses in areas that still depend on satellite or fixed wireless connections, the upgrades may not offer immediate relief.

NBN Co has stated it will continue to explore solutions for more complex premises not covered by FTTP upgrades. However, details remain vague, leaving many businesses uncertain about when—or if—they’ll experience meaningful improvements.

Our take: Why is the NBN upgrade happening now?

That depends on who you ask, but first and foremost this upgrade is well overdue.

The NBN’s controversial use of outdated copper technology was largely driven by political and economic factors following the 2013 election. 

The Abbott government shifted from a full FTTP approach to a Multi-Technology Mix (MTM), which included FTTN and Hybrid Fibre-Coaxial (HFC) technologies that relied on existing copper infrastructure. This decision was justified by claims of cost savings, faster deployment, and efficient use of existing networks.

However, the copper-based strategy has faced significant criticism and challenges for well over a decade. 

One could argue these technologies were already obsolete at the time of implementation. NBN Co later admitted to higher fault rates and maintenance costs for copper-based connections. 

The limited maximum speeds of copper compared to fibre have also raised concerns about the network’s future viability.

As a result, the government has had to commit billions to upgrade many copper-based connections to fibre, effectively acknowledging the short-sightedness of the initial decision and raising questions about the long-term cost-effectiveness of the MTM approach.

Another possible motivation behind this investment is the growing competition from alternative providers, such as Elon Musk’s low-orbit satellite service Starlink.

Starlink has gained traction among rural customers in recent years by offering faster speeds and lower latency than NBN’s current Skymuster satellite options. It has also partnered with both Telstra and Optus to help deliver these services for regional and rural businesses.

The government’s push to expand FTTP access could be an attempt to retain customers who might otherwise jump ship.

Lastly, and perhaps most pertinently, the announcement could very well be tied to 2025 being an election year. The Albanese government may be trying to scramble for rural and regional voters. It wouldn’t be the first time the NBN has been used as an election bargaining chip.

This also means if there is a change in government these upgrades could be walked back. We’ll just have to wait and see.

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