Tuesday, 07 August 2018 08:28

NBN Co revenue may take hit after 5G arrives: Rowland Featured

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Michelle Rowland wants an independent assessment of the NBN Co's financial projections. Michelle Rowland wants an independent assessment of the NBN Co's financial projections. Supplied

The financial position of the NBN Co, the company rolling out Australia's national broadband network, the NBN, is likely to worsen due to competition from wireless networks once 5G begins to make its presence felt, the Shadow Communications Minister Michelle Rowland has warned.

Rowland was responding to a query from an interviewer on Sky New about a recent study by credit rating agency Standard & Poor's that claimed the NBN would never make a profit and would have to take a damaging write-down which would have a political cost for the Coalition Government.

She told an interviewer on Sky News on Monday: "...here's where the real problem arises: and that's the impact of wireless competition with the advent of 5G and entry-level pricing at certain level for the NBN versus whatever entry-level pricing there will be for 5G services.

"And we know that in areas where the NBN is of a second-rate technology and people would rather use wireless services, then certainly even a very minor switch by consumers to wireless services will have an enormous impact on the already dire situation we have for the NBN's current economics."

NBN Co has said that it needs to achieve average revenue per user of $52 if it is to break even; during the last results announcement, the company said it had reached $44 ARPU making it unlikely that it would reach its target before the rollout was completed.

Rowland was asked what the Labor Party would do if the Australian National Audit Office undertook an assessment of key assumptions underlying the medium- and long-term financial projections of the NBN Co — as it has sought — and whether it would seek to write off the investment in the NBN.

She replied that Labor had asked for an ANAO assessment to obtain the information that it did not have as it was in Opposition.

"And we have a situation where the NBN (Co) not only obfuscates when it comes to getting answers to us on key economic issues and key issues about their business, but in some cases refusing to answer them at all," Rowland said.

"It's high time that we had an independent assessment of the mess that (Prime Minister) Malcolm Turnbull has made of this. We had a Joint Standing Committee of the Parliament call for this and it's high time we got this done so we have all the facts on the table, for the Australian public as well."

Asked whether she rejected the latest Auditor-General's report that said NBN Co had given a true and fair picture of the company's finances, Rowland said that one needed to look at what Standard and Poor's had said about this.

"It has specifically targeted the retrograde technology; it has specifically gone into detail about the dire situation in which we find ourselves with the economics of the NBN," she said.

"And we must always take into consideration the impact of factors such as second-rate technology, the costs of maintaining that; gosh, we've had HFC blow out by something like 50% and meanwhile, around the world, the costs of installing fibre have come down by just about as much."

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Sam Varghese

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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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