NBN Co’s accelerated push to replace copper connections with fiber has created unexpected growing pains, with the company paying out nearly 40% more rebates to retailers for service failures in the final quarter of 2025.
The network operator issued 32,411 rebates for FTTP service issues in the December quarter, up from approximately 23,247 in September.
NBN Co acknowledged that the spike stemmed from increased complexity in fiber upgrade orders during the second quarter of its 2026 financial year, as technicians worked to convert hundreds of thousands of premises at an unprecedented pace.
According to a NBN Co spokesperson in the first half of the 2026 financial year it converted 287,000 premises from copper connections to fibre. taking its upgrade total to more than a million.
However, the company conceded that some connection technology shifts in the field were proving to be less straightforward than others.
“During Q2 FY26, the increase in rebates payable relate to more complex orders received to fulfil a full fibre upgrade,”
“On occasion, given the complexity of these upgrades, the time taken to complete works went beyond the committed service level.” the spokesperson said.
The rapid conversion rate appears to have temporarily overwhelmed service delivery capabilities, even as fiber technology itself remains more reliable than the older copper infrastructure it’s replacing.
The numbers reveal an ironic twist in the network modernisation effort.
While legacy technologies like Fiber to the Node (FTTN) and Fiber to the Curb (FTTC) typically generate 40 to 60 service issues per 1,000 users, the rushed fiber rollout has temporarily elevated failure rates for the superior technology.
Industry observers suggest the problem lies in execution rather than the technology itself, with installation crews handling more complex upgrade scenarios than originally anticipated.
Despite the service hiccups, demand for high-speed connections continues climbing. Average monthly data usage across the network reached 557 gigabytes per active service as of December 31, 2025.
FTTP users consumed even more, averaging 668 GB per month, underscoring why the upgrade program remains critical even as it strains delivery systems.
The rebate payments compensate retail service providers when NBN Co fails to meet service level commitments, costs that ultimately flow through to consumers in the form of service credits or bill adjustments.
The higher payout rate suggests the company may need to slow its conversion pace or add installation capacity to maintain quality standards while pursuing its fiber replacement goals.
