NBN Co’s ambitious plan to rid the network of copper is running into execution problems, with service failures climbing sharply as installation crews struggle to keep pace with an accelerated rollout schedule.
The network operator converted 287,000 premises from copper to fiber in the first half of its 2026 financial year, pushing the total beyond one million upgraded homes and businesses.
But the rapid conversion rate has come at a cost, with NBN Co paying retailers 32,411 rebates for FTTP service issues in the December quarter alone. That represents a 40% jump from the roughly 23,247 rebates issued three months earlier.
NBN Co says the increase reflects growing complexity in fiber upgrade orders during the period, suggesting installation teams are encountering more challenging scenarios than expected as the program scales up.
The service failure pattern creates an unusual situation. Fiber technology typically outperforms the older copper-based systems it’s replacing, with FTTN and FTTC connections generating 40 to 60 issues per 1,000 users under normal conditions.
However, the breakneck installation pace has temporarily pushed fiber failure rates higher, raising questions about whether NBN Co is moving too fast.
The rebates compensate retail providers when the network operator misses service commitments, costs that retailers typically pass along to customers through bill credits.
The rising payout rate suggests quality control may be slipping as NBN Co races to complete its fiber transition.
Consumer demand for the upgrades remains strong regardless of the installation troubles. Data usage hit 557 GB per month across all active services by year’s end, with fiber customers consuming 668 GB on average.
The rebate increase arrives at an awkward moment for NBN Co, which is currently locked in negotiations with the competition regulator over what service standards it should be required to meet.
NBN Co and the ACCC are hammering out benchmark performance targets as part of the special access undertaking (SAU), the regulatory framework that governs how the network operator does business.
The standards cover service levels across all the different technologies NBN Co uses to deliver connections.
The two sides are far apart on cost. NBN Co says the ACCC’s proposed standards are technically impossible to meet in some cases and would cost around $610 million over five years.
The company has countered with its own proposal priced at $134.1 million over the same period.
Much of the dispute centers on copper infrastructure, particularly in regional areas, where NBN Co is reluctant to invest in maintaining aging networks.
The company argues that capital is better directed toward fibre, which it says is more reliable and cheaper to operate over the long term.
The timing creates a credibility problem. NBN Co is telling the regulator it can’t afford to meet certain service standards while simultaneously reporting a surge in service failures and rebate payments, particularly on the fiber network it describes as superior to copper.
