Is the greenfield broadband opportunity going to improve?

Housing market data suggests a stabilization in dwelling commencements, offering growth potential for NBN rivals.

Heath Gibson · Executive Manager – Industry Intelligence and Insights at NBN Australia19 July 2024Period: H1 FY244 min read

+0.7%↑

Increase in dwelling commencements (March 24 quarter, trend basis)

89%↑

Estimated NBN share of new dwelling completions (H1 FY24)

Locked

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Abstract

This brief examines the latest housing market data for dwelling commencements and approvals as a leading indicator for growth in the fixed broadband market. Higher growth in new developments would be more favourable for NBN’s fixed line competitors, such as Uniti and Gigacomm, as these areas are more contestable than established brownfield zones. The report also highlights NBN Co’s decision to discontinue weekly reporting, which will reduce visibility into its performance in the critical greenfield segment.

Key Takeaways

Dwelling commencements rose 0.7% in the March 2024 quarter, ending a three-year downward trend since the June 2021 peak.
NBN Co's share of new dwelling completions surged to 89% in H1 FY24, significantly higher than the 80% recorded in FY23.
Greenfield developments are more contestable than brownfield areas, providing growth opportunities for NBN rivals like Uniti and Gigacomm.

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Frequently Asked Questions

Yes, dwelling commencements rose 0.7% in the March 2024 quarter, marking the first reversal of a downward trend that began after the June 2021 peak. While dwelling approvals remain low compared to the pre-pandemic decade, this uptick suggests a stabilization in the primary growth engine for fixed broadband.

NBN Co has significantly consolidated its position, with its share of new dwelling completions surging to 89% in H1 FY24. This represents a substantial increase from the 80% share recorded in FY23, leaving less than 11% of the market for private fiber competitors.

Market transparency will decline following NBN Co’s decision to discontinue its 'Weekly Progress' report. This removes the only public data source providing a granular split between greenfield and brownfield activations, complicating performance benchmarking for rivals like Uniti and Gigacomm.

NBN Co must now balance its resources between managing an 89% share of new builds and its ongoing brownfield fiber upgrade program. The 0.7% increase in commencements indicates that capital allocation will need to remain flexible to support both new estate connections and existing network modernization.

Abstract

Key Takeaways

Frequently Asked Questions

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