NBN threatens just $897m in revenue, says Telstra

27 Mar 2009

Telstra has calculated that just A$1.28 billion ($897 million) of its revenue has been put at risk by the government's planned National Broadband Network (NBN) project, CFO John Stanhope said.

Stanhope said analysts' predictions of the impact on Telstra's business of the NBN were overblown.

Telstra was excluded from the NBN tender process in December for submitting an incomplete bid.

Analysts have predicted the NBN could take between A$0.30 and A$1.75 off Telstra’s share price, Stanhope told the Credit Suisse Asian Investment Conference in Hong Kong this week.

But Telstra has considered hundreds of possible scenarios, and “in every case our worst case scenarios do not get close to the downside claimed by some,” Stanhope said.

Even under the worst scenario, these moves will not cost Telstra more than A$0.69 per share, he said.

Just A$500 million, or 20%, of Telstra's wholesale revenue – which was A$2.5 billion in 2008 - $620 million – 9% - of its A$6.9 billion retail and $165 million of its $1 billion enterprise and government revenue could be put at risk by the project, Stanhope added.

“I am sure you will read a couple of analyst reports tomorrow accusing us of underestimating the risk,” he told the potential investors. But he said Telstra knows its business better than anybody, and added that he was legally obliged to disclose the truth to investors.

Communications Minister Stephen Conroy is expected to announce the winners of the NGN bidding by early April.

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