NBN Co to stop taking new HFC orders for 'several months'

NBN Co will stop taking new orders for hybrid fibre coaxial (HFC) services from tomorrow due to a global shortage of chips used in the network termination devices that are installed at customers’ premises.

NBN file image.

The network builder said that the pause on HFC sales is expected to last “several months”, though it still had an existing supply to lean on for vulnerable customers or as replacements if faults arise. The pause was first reported by CommsDay. 

“We apologise to new customers that may be affected by this global supply chain issue and the anticipated delays,” NBN Co said in an advisory on its website.

“While this issue only affects a small number of potential customers relative to those on HFC, and this decision will not affect other customers connected to the nbn by other technologies, we appreciate that for those customers yet to connect to the nbn HFC network, this is frustrating.”

NBN Co said it would not process orders that were marked after February 1. 

“If your premises is connecting to the NBN network for the first time and we don’t have an order in our system before February 2, the order will not be able to be placed,” NBN Co said.

However, the company said it intended “to continue enabling orders to be placed for premises that will be reconnecting to the NBN HFC network (i.e. if the previous occupier of the premises had been connected to the NBN before moving).”

It will also have enough NTDs to replace any existing ones that have issues, or to fulfil orders from vulnerable customers.

In a separate letter to retail service providers (RSPs), NBN Co said Covid-19 had led to heightened consumer demand for devices, which put pressure on silicon foundries.

"[This has] impacted the manufacture and supply of the integrated chips that are used across various industries, including the telecommunications industry," NBN Co wrote.

"The supplier of NBN Co’s HFC NTDs has been unable to secure sufficient chipsets supplies to fulfil its commitments, and on Thursday 28 January 2021 issued NBN Co with a Force Majeure event notification to this effect."

NBN Co's chief customer officer Brad Whitcomb added in a statement that the company had been "monitoring this issue for several months since we first became aware the global shortage of chipsets affecting various industries, including telecommunications."

"As a result, we have been working closely with our supplier to build up our HFC equipment inventories in our warehouses as much as possible," he said.

It’s the second time NBN Co has had to initiate a pause on HFC orders. 

Back in 2017, it paused orders to rectify quality-of-service issues at a cost of $900 million.

This pause will impact a lot less customers; NBN Co said it has “more than 1.9 million premises” activated in the HFC footprint, out of a target of 2 million premises for FY21.

It is understood around 50,000 new orders will be delayed if this latest pause is in effect for three months or more.