NBN Co executive chairman Ziggy Switkowski has reiterated the inherent risk that infrastructure competition poses to the viability of the National Broadband Network, telling a Senate committee that it could hurt NBN Co's bottom line by up to 10 per cent.
Dr Switkowski made the comments in reference to the planned rollout of a fibre-to-the-basement (FTTB) network by TPG Telecom.
While the legality of the move is under review, Telstra has made it clear that it will pursue a similar strategy if TPG gets a green light for its plan.
The prospect of TPG and Telstra both rolling out and operating their respective FTTB networks would have a detrimental impact on NBN Co, especially as the telcos would cherry pick the most lucrative areas to deploy their services.
The loss of high-value urban customers will weaken the company's revenue base, with Dr Switkowski telling the committee that NBN Co cannot afford to give up high-value properties, and that such deployments could force NBN Co to respond in kind.
NBN Co has started connecting apartments in Melbourne using FTTB technology, with Telstra, Optus, iiNet and M2 all participating in a three-month trial.
Trials are under way in eight high-rise buildings with NBN Co chief technology officer Gary McLaren saying that the trial is designed to provide a clear picture of the FTTB construction process, performance and customer experience.
"A lot of it is the operational interworking of our equipment with the retail service provider," Mr McLaren said.
Internet users taking part in the trial will need to obtain a new modem from their internet service provider.
The original NBN plan from the former Labor government proposed connecting high-capacity fibre optic cable to every single premises in the country, including apartments.
There will be up to 200 premises connected during the trial, which is taking place across eight buildings in the Melbourne suburbs of Carlton, Parkville and Brunswick.