NBN Co has been an obscene waste of money and destroys value in Telstra. The NBN Co has been a massively poor income stream for Telstra and like John Wylie says it should be sold off while it still retains value for TLS.

Labor tips another $3b into the NBN to make copper history

Copper-wire internet could soon become a thing of the past after the federal government committed up to $3 billion to the National Broadband Network to extend faster connections to the doors of most homes and businesses.

The funding brings taxpayers’ stake in NBN to about $35 billion, an amount that is never likely to be recouped after Labor backflipped on its original plan to privatise the network.

Labor at the last election promised to roll out a fibre internet to all premises as envisaged when the policy was first announced in 2009 by the Rudd government, and Prime Minister Anthony Albanese on Monday said the cash injection – along with $800 million from NBN Co – would “finish what we started”.

The latest funding round will give an additional 622,000 premises the option of full fibre access – as opposed to fibre to a node in the street and copper for the final stretch – at an average cost to NBN Co of about $6000 each.

That is higher than the average $3600-per-upgrade cost from $2.4 billion set aside in the 2022-23 budget that gave 660,000 premises the option of getting fibre internet. The higher cost was because more than half of the homes and businesses involved are located in rural and regional areas where delivering fibre is more expensive.

Even as things stand, the government may eventually need to write down the carrying value of its equity stake in the company, which would also hit the budget bottom line.

Eligible households and businesses will not have to pay for the new fibre upgrade but must commit to the cost of a particular internet plan or higher, which will allow NBN Co to boost its revenues as more people take up the option.

On NBN Co’s estimates, the rollout is possible without forcing customers to pay for a connection because over the medium term, it will encourage more customers to stay with NBN and not jump to 5G or Elon Musk’s Starlink satellite option, as well as encourage more customers to sign up to NBN for the better internet speeds.

Taking up fibre to the premises will initially be voluntary, but the funding will give NBN Co the ability to cease fibre-to-the-node connections in future and go with a wholly fibre-to-the-premises network. This will allow NBN to save huge sums on maintaining the copper network, which is degrading by 4 per cent every year.

The government expects that once the upgrade is completed, more than 94 per cent of premises on the fixed-line network – more than 11 million homes and businesses – will have access to speeds of up to 1 GB per second on fibre to the premises or hybrid fibre coaxial connections.

Communications Minister Michelle Rowland said she expected that over the next decade, every Australian household would have 40 internet-connected devices on average and use more than a terabyte of data every month, underlining the importance of improving speeds.

NBN Co chief executive Ellie Sweeney said the average household consumed about 10 times more data than it did when the NBN was built.

Mr Budde said consumer demand had largely stabilised at speeds between 50 and 100 megabytes per second, well below what the NBN would offer.

“Future increases in broadband speeds offered by NBN Co are unlikely to significantly boost revenue,” he said, which would undermine NBN Co’s business model.

Opposition communications spokesman David Coleman said the opposition would not seek to block the funding, but said the government was spending money on a network in crisis.

He said the satellite portion of the NBN, which services regional areas, was failing to ward off competition from the likes of Starlink.

“It’s haemorrhaging customers, and it’s haemorrhaging taxpayer’s cash. If you talk to pretty much anyone in regional Australia, they will tell you that the NBN is a joke,” Mr Coleman said.

Mr Coleman said the Coalition “won’t stand in the way” of the investment or seek to scrap the multi-year deal with NBN Co if elected.

“We will take advice from the Department of Finance, if we’re successful in the election, on the best way of implementing this new investment.”

It is the way the Government is treating all of the private sector not just Telstra.