60% chance of nbn failure -> $2.7bn tls compo

This from Commsday:

Scaleback of NBN still likely: analysts

Analysts at Deutsche Bank have rated the likelihood of a scaleback of the NBN as high as 60%, noting
that the ?break fee? is unlikely to be paid given that the rollout won't reach the 20% threshold by the next
election.

The firm said that if the Coalition comes to power in 2013 it may find it easier to terminate the NBN,
given that it is unlikely the NBN rollout will reach even 10% of households by 2013. As a result, the report
posits that there is an increase in the level or risk and uncertainty around the NBN cash flows in future.
Deutsche Bank suggests that if the coalition does win the election, the most likely outcome is a major
scale back of the NBN with lower probability outcomes around suspension. ?This is based on our assessment
that the Coalition, whilst opposed to the NBN, may find it impractical to shut down the NBN completely
and would implement a common sense solution to a fast broadband alternative based around the
use of existing infrastructure wherever possible to reduce the cost of the upgrade,? said the analyst company.
GS VIEW: Meanwhile, Goldman Sachs analysts said in a report that they were taken by surprise that Telstra
would be responsible for the costs of remediation work on its duct network, which could be as high as
$2 billion.


However, the GS research arm still believed that Telstra would come out ahead if the Coalition wins
power and substantially changes the NBN. ?If the Coalition wins the election and there is a change in government
policy (ie, NBN rollout is halted), we estimate Telstra will receive c.$2.7bn in compensation,? it
said in a research note following the agreement.
Geoff Long