NBN information: the floodgates open

Stuart Corner
Monday, 20 December 2010 15:24

IT Policy - Government Tech Policy

The Government has released the NBN business plan, not complete but with much detail of a wide range of wholesale service offerings, including prices, estimated take up rates, revenue etc and the ACCC has published its advice on the controversial point of interconnect question, recommending 120 - many more than NBN Co's preferred option of 14.

The Government has also issued its final response to the NBN implementation study under the title: NBN Rollout; Statement of Expectations. It covers the Government's expectations in relation to, among other things, coverage and premises to be served, NBN Co's role in new developments, the legislative and regulatory framework, ownership arrangements, funding, planning, reporting and performance management.

Key points of the NBN Co Business Plan are for the basic 12/1Mbps wholesale service to be available Australia-wide for $24 per month.

In addition it will offer a fibre access service with committed speed options of up to 100Mbps and peak speed options of up to 1Gbps. For those beyond the reach of fibre and terrestrial wireless, NBN Co intends to offer an initial version of the satellite product which will be 6Mbps downstream and 1Mbps upstream prior to the launch of the long-term 12Mbps downstream satellite product in 2015.

NBN Co is forecasting a seven percent internal rate of return and a government equity injection of $28.5b, it forecasts annual revenue of $5.8b in FY2021 and $7.6b in FY2025, and a 9.5 year construction period, peaking at 5900 premises per day. Total capital expenditure to the end of the construction period is forecast at $35.9 billion and totals operational expenditure net of revenue over the same period is $1.0 billion.

NBN Co has assumed that 70 percent of premises passed by the network will take up a service. This figure takes into account an estimated 12 percent of premises being unoccupied, 13 percent using wireless products and five percent using other existing fixed line networks.

NBN Co said "Commercially-sensitive aspects of the plan, as expected, remain confidential and have not been released given NBN Co is in commercially-sensitive negotiations with a number of parties."

However CEO, Mike Quigley said: "There is certainly enough information in this corporate plan for anyone to clearly see our assumptions and how we intend to build and operate the network." He added that the forecast rate of return to Government "takes no account of the broader productivity and community benefits of the project."

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