http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/nbn_running_out_of_money_with_little_done/ NBN running out of money, with little done
Telecommunications analyst Ian Martin on the financial disaster emerging from Kevin Rudd’s NBN:
NBN Co has spent 12 to 14 per cent of its capital budget but less than 2 per cent of premises are passed by fibre and less than 0.5 per cent are using NBN fibre. It has commenced fibre construction to less than 10 per cent of its fibre rollout target. On the foundation arrangements [departing NBN boss Mike] Quigley has set in place and at the current run rate, by the time of the 2016 election NBN Co will have spent about 60 per cent of its capital budget but delivered only a small fraction of the project outcomes due by then…
It’s with revenue that the foundations set by Quigley are most insecure. NBN Co’s revenue targets require rapid take-up of the NBN service and a steady migration to 100Mbps service levels to achieve a 6 per cent increase in average revenue per user every year for more than a decade. Given fixed network revenue has been in decline for four years that assumption is very shaky. It’s not helped that NBN’s special access undertaking over NBN wholesale access prices, now being considered by the ACCC, sets entry level 12Mbps and 25 Mbps wholesale prices at the same levels as currently used for equivalent copper-based wholesale services. However, the copper prices are based on historic cost and wouldn’t be sufficient even to replace the copper network with another copper network. NBN Co agreed to this price constraint for political rather than sound business reasons.
This could be the single greatest loss of money from a single government project in our history.
