The Government today released the Implementation Study prepared
by KPMG and McKinsey which was commissioned to examine myriad
aspects of the NBN project, including the NBN's coverage, the
Government's ownership, the operating arrangements of NBN Co
Limited, commerciality and competition objectives as well as ways
to attract private sector investment. In short the findings say
can be built for significantly less than $43 billion, and
the Government will ultimately recover its investment on a
Key findings of the Implementation Study
The Government's objectives for the NBN can be implemented
within the $43 billion earmarked for the NBN project, and the
creation of the NBN may only cost around $26 billion. This can be
achieved by deploying:
fibre to 93% of premises (up from the Government's promised
fixed wireless and satellite for 4% of premises, and
satellite only to the final 3% of premises.
Consumers will benefit greatly from the NBN with:
speeds of between 25 and 100 Mbps, and
monthly prices of $50-$60 are possible.
NBN Co should continue to be fully Government-owned until after
the NBN rollout is complete. It could then be sold and would recoup
the Government's initial investment plus a utility-style return
At this time, rather than diluting equity in exchange for
assets of other telcos, there is a large capacity for
investment-grade debt prior to full privatisation of NBN Co.
To ensure efficient deployment of the NBN, the Government
set clear, practical and transparent obligations
maintain a willingness to share existing infrastructure
provide all required legislative support to NBN Co, and
run a public tender process for a provider to build and deploy
a fixed-wireless solution.
Retail competition can be improved by:
eliminating network and backhaul bottlenecks
maintaining NBN Co's wholesale-only, open access
operating at the lowest appropriate layer, and
monitoring the health of retail competition.
Entry level wholesale prices for voice and 20mbps service
around $30-35/month is possible.
The NBN will require a mixed physical deployment with both duct
and aerial components, potentially meaning another wire on poles
for up to 55% of the distribution distance.
The fibre network could become the primary fixed line telecoms
infrastructure through affordable pricing and providing continuity
for existing services.
The Government has said next week's budget will have full
provisions for the NBN project.
The Implementation Study is available for review
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