Under pressure from 5G and Elon Musk’s Starlink satellite network, the NBN has moved to slash more than 500 jobs, and cut the amount of floor space they rent, while also setting out a framework for price rises.
Recently, the network provider said they had lost more than 10,000 rural customers to Musk’s Starlink network.
Facing a new 5G threat, NBN Co will cut 500 jobs from its 4650-strong workforce by the end of June.
Shortly, Optus is set to launch a major 5G home initiative, which will allow households to install Matter-certified home automation gear that will work across multiple platforms, including Google Home, Apple, Samsung SmartThings and Alexa.
Another problem for the NBN is fixed wireless or satellite providers, with several new services tipped to be launched in coming years.
Chief executive Stephen Rue broke the news to employees at an all-staff meeting on Tuesday afternoon. In an email to staff after the meeting, obtained by The Australian Financial Review, he said the NBN’s “environment is changing”.
“The competition NBN faces to win and retain customers is intensifying,” Mr Rue says. “[And] continuing to deliver on our purpose of lifting the digital capability of Australia means navigating these changes.”
Most field work on the network now comprises regular maintenance and upgrades, like connecting fibre directly to homes.
NBN Co has increasingly acknowledged the growing competitive threats it faces, particularly 5G fixed wireless offerings from retail internet providers looking to increase profit margins by avoiding reselling connectivity to the national network where wholesale costs are high. In the bush, satellite providers like Elon Musk’s Starlink are creeping onto NBN Co’s home turf.
Mr Rue said the changes would “simplify” the company and cut duplication, making NBN “more commercially and operationally efficient”.
“They will make NBN leaner. Our employee base across the company will reduce by around 500 people, or about 10 per cent,” he adds. “I appreciate this is difficult news to hear and to digest … This will be a difficult time.”
Communications Minister Michelle Rowland says, “The changes made by NBN Co are significant and will personally impact a lot people.
“I expect NBN Co to consult closely with affected workers and the unions to manage this change sensitively and effectively.”
NBN Co is in ongoing discussions with retailers and the competition regulator about proposed pricing changes, which would come into effect in July.
Last month in its financial results, NBN Co narrowed its losses and reported revenue up 4 per cent year-on-year to $2.6bn for the six months to December 31, 2022, and chief executive Stephen Rue said the company was on track to meet its 2023 performance targets, buoyed by demand for higher speed plans.
More than 8.5 million premises are now connected to the network nationally. It posted a net loss after tax of $444m, from $857m a year earlier.
Last month they handed back six floors of its North Sydney head office to their landlord as more staff choose to work from home.
This represented about a third of its floor space at the building. The Company has also recently vacated a second office near its North Sydney headquarters.
