NBN Co says it will have to spend 33 per cent more for rural broadband, because it did not estimate how many people would want to be connected.

NBN Co’s latest report says 620,000 residents in regional and remote Australia want broadband by 2021.

That figure is three times the previous estimate of 230,000 in the 2012-15 Corporate Plan.

The company in charge of rolling out the random mix of technologies and services that will comprise the National Broadband Network says the extra cost will be $1.5 billion, taking the total to $5.2 billion by 2021.

Bill Morrow, the new chief executive of NBN Co, says that unfortunately no money will be made from improving the connections for Australia’s most disconnected residents.

“These areas in remote and rural Australia - it costs us more than the revenue we’re going to generate, so this is a loss-making proposition,” he said at the launch of the latest NBN Co report.

“So we will subsidise that with the city areas, where we will see greater revenues, greater probabilities. Therefore, the system works to be able to provide all Australians with broadband service at a reasonable and affordable price,” Morrow said.

The review has called for;

  • Doubling the number of wireless stations to 2,700, which would broadcast services to 85 per cent more regional and remote homes. 
  • Extending the fibre-to-the-node networks to 25,000 homes, farms and businesses that had been slated for a fixed-wireless or satellite connection.
  • Imposing tight restrictions on the use of satellites, to ensure bandwidth is not overloaded.
  • NBN Co has also flagged the option of negotiating with a third party to share a satellite, following the launch of NBN Co’s own two satellites for wireless remote services.

The company also plans to buy radio spectrum for fixed wireless NBN, which could connect 80,000 premises in urban fringes such as the Gold Coast hinterland.

But the NBN Co document was launched with blacked-out sections about costs, saying some details are confidential.

The cost of building additional base stations and associated spectrum has been censored, as has the cost of buying radio spectrum for urban fringe areas.

The NBN Co CEO maintains that 25mbs download and 5mbs uploads are the most affordable speeds it could aim for.