As part of its results briefing last week, NBN included details of customer satisfaction ratings – known as a net promoter score (NPS), which gets customers to rank how likely they are to recommend a product to others. It found that early users of its fibre to the node products score their experiences as 7.7 out of 10, which is exactly the same as those on fibre to the premises.

Early days for FTTN users

Mr Morrow conceded that it was very early days for users on FTTN NBN connections, and the sample size of current customers represented about 100,000 people out of an eventual 5 million that would be connected via the technology.

He rejected the idea that users would find their connections unsuitable within a few years, saying extensive research and development was still being conducted into copper technology, which would make the existing infrastructure's performance and speed increase in coming years.

"If you look at a graph today and ask how long it will be until 25 Mbps will be capped out, you could get to a point in the future – like five years – as when we would have to replace the network if nothing else changed," he said. "But the technology is going to evolve to where that 25 Mbps limitation will grow to 200 and therefore you have more than five years' capacity left in that network with that kind of technology."

He said it was very hard to predict how technology would evolve, and said it could be a couple of decades before it became necessary to think about upgrading all connections to fibre to the premises.

"Let's quit fussing around. Let's get everybody to have the service and create an industry around it," Mr Morrow said.

"All of us and the engineers would love to have fibre because there's no power, it's a brand new network, it's not susceptible to water, it has great advantages, but, shoot, it costs a fortune. So until people are willing to pay for it, we are good with what we have."


Discussions 'quite intense'

One of the ongoing issues that Mr Morrow is addressing is controversy about how much ISPs such as Telstra, Optus and TPG Telecom are charged to connect to the NBN. Some industry executives have previously claimed the amount of data consumed by customers on popular TV streaming services such as Netflix would make it unaffordable.

Under the connectivity virtual circuit (CVC) charges, ISPs pay to guarantee bandwidth for their customers, and discussions have been under way for some time to figure out how charges could be better calculated.

In NBN's half-yearly report, Mr Morrow said negotiations would be concluded in the first half of the year. However he told the Financial Review the discussions remained "quite intense", and that it would realistically be April or May before any decisions were made.

"I think for sure we are going to do something different. We want to encourage heavy usage, because heavy usage brings value to the end user, it brings value to the RSPs [retail service providers] and then, of course, continues value for NBN," Mr Morrow said.

The plan will be based around a model where the more capacity an ISP buys, the cheaper the cost per byte will be.

"Of course, when they see models of how a price may look [they will all] say, 'oh, it has got to be lower than that', but that is just natural market tension that goes into play," he said.

"Of course we don't have to agree, we can charge whatever we think the market will bear, and they choose to buy the service or not. But I can tell you that in the consultation process the construct of it that we are looking at, they like a lot."