Aust NGN to cost $35b

Telstra’s involvement in Australia’s next generation broadband network project will shave A$7 billion ($6.9b) from construction costs, according to estimates by NBN Co.

 

The first hard figures on the project reveal the total cost of constructing the network will be A$35.7 billion ($35.1b), the bulk of which – A$27.1 billion – will come out of the public purse, with the remainder paid for by NBN Co., the government-owned firm established to run the network.

 

Previously the government had estimated the nationwide fiber network could cost as much as A$43 billion.

 

Telstra will receive A$14 billion in cash payments from NBN Co over the next 30 years to cover its involvement, the plan revealed.

 

The government released the NBN plan Wednesday as part of a deal with a key independent Senator Nick Xenophon to win passage of the broadband legislation through parliament. 

 

The legislation, which provides for separation of Telstra, looks likely to pass the senate with Xenophone’s support today.

 

NBN Co. plans to conclude negotiations with Telstra on decommissioning copper lines by December, with a view to starting trials of the network early next year.

 

Splitting Telstra’s retail arm from the rest of the company is a key condition of the government’s plan to offer Telstra A$11 billion for its copper ducts and infrastructure, and have Telstra sign on as an NBN customer.

 

The opposition Coalition has said it might drop objections to the legislation if the government agrees to submit to a cost-benefit inquiry by next May.