NBN will come in under budget

Stephen Withers
Wednesday, 08 September 2010 19:16

IT Policy - Government Tech Policy

There has been all sorts of scaremongering about the cost of the NBN, but industry executive Phil Sykes is convinced there won't be a budget blowout.

Asked about the likely cost of the NBN, Phil Sykes said "it's not going to cost $A43 billion" and that Australian engineering capability will bring the project in well below that figure.

Sykes is the managing director of Nextgen Networks, the Leighton subsidiary that already operates a fibre optic network that is used by carriers and ISPs as well as some large businesses.

Nextgen is also currently laying fibre under the Federal Government's Regional Broadband Blackspots Program (3000km laid with another 2800 to go).

If you're still not convinced that he knows what he's talking about, Sykes previously led Telstra's Internet program, including the team that designed and deployed the BigPond Cable network.

It seems likely that Nextgen will be in the running for additional NBN-related contracts, so he can't be viewed as a disinterested party. However, there's little to be gained by under-bidding for contracts and then making a loss on them.

Furthermore, NBNCo's initial rollouts to premises in Tasmania also came in under budget.

There have also been claims that fibre optic cables have a limited useful life, possibly as little as 15-25 years. According to Sykes, the cable being used by Nextgen has an expected life of 50 years.