Friday, 25 January 2019 04:01

Labor says no evidence for Switkowski claims on NBN sale value Featured

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Ziggy Switkowski: "I could certainly generate - and do generate - figures around $50 billion for the value of this company in the early 2020s.” Ziggy Switkowski: "I could certainly generate - and do generate - figures around $50 billion for the value of this company in the early 2020s.” Courtesy YouTube

The Australian Labor Party has labelled valuation claims of the national broadband network made by NBN Co chairman Ziggy Switkowski as bizarre and said no evidence has been produced to back up the price tag he has put on the company.

Labor also accused the government of damaging the long-term economics of the national broadband network by its decision to opt for a multi-technology mix rather than the fibre for a majority of premises as in the original plan.

Labor Shadow Communications Minister Michelle Rowland and Shadow Finance Minister Jim Chalmers said in a joint statement that even after 92 days of NBN Co chairman Ziggy Switkowski claiming that the network could still fetch a price of $50 billion once it is fully rolled out in 2020, no evidence had been produced to back his claim.

Switkowski made the claim during a Senate Estimates hearing on 24 October 2018, adding that in his personal opinion, a write-down of the network was not needed. “I could certainly generate — and do generate — figures around $50 billion for the value of this company in the early 2020s," he said.

Rowland and Chalmers said the NBN Co had confirmed it had "not received advice from any advisory firm, investment bank, market analyst, or suitably qualified professional, to support the chairman's claims".

Nine days before Switkowski's assertion, Rowland had said Labor was keeping open the option of writing down the value of the NBN.

And in July 2018, the ratings agency Standard & Poor's said the NBN would not return a profit from the billions invested in the project, adding that the NBN Co's business model had led to telcos investing heavily in mobile services to avoid paying the company's inflated prices.

S&P has also pointed out that the advent of 5G networks will not provide any kind of salvation for telecommunications providers who are desperate for some way of fighting back against the unreasonably high prices charged by NBN Co.

Rowland and Chalmers said: "Questions on notice from Labor Senators afforded NBN Co the opportunity to produce analysis or advice to support the claim, but the Senate tellingly received a heavily delayed response with no attempt to substantiate the claim.

"Given the significant difference of opinion with reputable analysts, the chairman either needs to support his statement with evidence or correct the public record.

"No amount of misleading spin can hide... the fact [that] the flawed decision to use copper and HFC has severely damaged the long-term economics of the NBN and destroyed taxpayer value."

When construction of the NBN was begun in 2009, Labor was in power and it envisaged fibre being rolled out to the premises for 93% of the populace, with the remaining 7% to be supplied with connectivity through either wireless or satellite.

The rollout became a political issue when the Coalition Government that took power in 2013 decided to change the technology of the network to what it called a multi-technology mix.

The MTM includes fibre-to-the-node, HFC cable, satellite, and wireless, apart from fibre-to-the-premises which is being provided only to new dwellings.

As the MTM plan and the connections provided have come under increasing criticism, fibre-to-the-distribution-point, which considerably reduces the copper lead-in to premises — what the network builder NBN Co calls fibre-to-the-curb — has been introduced as well.

The rollout of the NBN is scheduled to be completed in 2020.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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