NBN Co. doesn't need Telstra, or does it?

Staff writer
08 Jun 2010

The Australian government's plan to roll fiber to 93% of the population is feasible without Telstra's involvement, according a joint study released last month by KPMG and McKinsey.

The study estimates that the state-owned NBN Co. - which will build and operate the network - would make a "modest return" of 6%-7% per year from year 15 without Telstra's involvement.

Originally, the government had estimated it would have to invest up to A$43 billion in the project.

Communications Minister Stephen Conroy said the report showed there were "opportunities to significantly reduce the build cost" to less than A$38 billion ($32.6b).

So how can A$5+ billion be shaved off the rollout bill? With Telstra's involvement in NBN, of course!

The study estimates savings of "A$5 billion or more" could be achieved if the government were able to strike an infrastructure sharing deal with Telstra.

In short, NBN Co. doesn't need Telstra to be a viable proposition, but oh, it could be a lot more prosperous if it did cosy up with the incumbent.

Now it's clear.

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