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NBN rollout on track

Apparently the National Broadband Network (NBN) rollout is on target.

NBN Co, the government owned organisation responsible for building the NBN says that it has exceed its target to have construction commenced or completed in areas covering 758,000 premises before the end of 2012.

The total number of premises was 784,592 by year end, although NBN Co notes that construction commencement is measured when the company issues instructions to its contractors for a Fibre Service Access Module (FSAM), not when the contractor actually starts laying fibre.

The company did not say how many users had been connected to the NBN, which so far have been a disappointment. The company says it usually takes 12 months from the start of work until homes and businesses can connect.

In December last year, Communications Minister, Stephen Conroy said the take up rate was around 25%, or 1 in every 4 people. Opposition MP, Malcolm Turnbull has criticised the government suggesting that 75% of people haven’t been convinced to switch over, and the take-up rate is well below the NBN’s corporate plan released in 2010.

For telecommunications companies including the big four, Telstra Corporation (ASX: TLS), Optus – owned by Singapore Telecommunications (ASX: SGT), TPG Telecom (ASX: TPM) and iiNet Limited (ASX: IIN), the NBN offers an opportunity to provide faster services to their customers, but also a complication.

With wireless broadband services becoming ever popular, and the speed of 4G networks even outpacing copper ADSL broadband, users may opt to pass on fixed broadband, and use wireless instead. Despite the NBN’s predominantly fibre broadband being able to offer much higher speeds, users may choose the flexibility of wireless over speed.

The Foolish bottom line

2013 is election year, and the Federal opposition is no fan of the current NBN plan. Should we have a change of government later this year, we could see the current NBN rollout grind to a halt.

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Motley Fool writer/analyst Mike King doesn’t own shares in any of the companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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