Turnbull in talks to sell NBN to large telcos

Originally posted by jitttlatw07 ↑

Turnbull in talks to sell NBN to large telcos

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The Turnbull government is in discussions with large telecommunications companies about selling large chunks of the government-owned National Broadband Network, including its huge hybrid fibre cable, copper and fixed wireless networks.

A combination of the government's dire fiscal position, and criticism of the progress at NBN is fuelling the decision to engage in what would in effect be the biggest privatisation since the Howard government offloaded Telstra.

The talks are at an early stage and the government is not committed yet to a sale. If the sale goes ahead it will not take place until after the next election, expected in October 2016.

Details of the proposal are sketchy, but industry figures believe the government is committed to hiving off large parts of the Labor-created NBN operation during 2017, assuming the Coalition wins the next federal election.

Well-placed trade sources say Telstra is the likely bidder for the bulk of the NBN assets.

Australia's largest telco is in a strong position to extract favourable terms from the government, particularly for the upgraded copper network, which Telstra was obliged to sell to NBN.

However, other, smaller players are also keen to become involved.

Various sale figures are floating around telecommunications circles and depend on how much of NBN is offloaded. Trade sources say there are "two separate conversations going on", one where a much larger part of the NBN network would be sold.

However, the final sale figure is likely to be as low as $20 billion, those same trade sources say, which would effectively mean a massive loss for the government, although longer term ministers expect that such a sale would help the government's fiscal position. In the event the government does not receive adequate bids, it might delay the sale or abandon it.

Meanwhile, NBN has replaced its last Labor-appointed board director, Alison Lansley, with former energy industry executive and Commonwealth Scientific and Industrial Organisation director Shirley In't Veld.

Fairfax Media revealed in November NBN and the federal government were preparing to replace Ms Lansley, who was one of just two Labor-appointed NBN directors to survive the Coalition's election victory in 2013.

The other director, Dr Kerry Schott, was reappointed but it was understood Ms Lansley would not remain in the position.

Communications Minister Mitch Fifield and Minister for Finance Mathias Cormann confirmed the move in a joint statement and announced that Ms In't Veld would replace her on the NBN board.

Ms In't Veld was on the board of Western Australia's biggest power generator Verge Energy for five years before leaving in April 2012. She then joined the board of the CSIRO in 2012 and was reappointed for another term in June 2015. She is also a non-executive director of ports provider Asciano.

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The original idea was to sell the NBN Co as a profit making operational entity after it was completed.

Considering the NBN Co had only spent around $7b prior to Turnbull taking the reigns, where did the $20b in value come from?

Is Turnbull going to sell the profitable components and keep the non profitable components of the NBN. And will the taxpayer have to subsidize the non profitable areas forever, which would have otherwise been carried in the NBN Co's complete business structure.

This smells of Turnbull realizing he has stuffed up the NBN and the business model, and this is his way of hiding his stuff up by breaking up the NBN.

Turmbull's NBN = Lower benefit to Australia, lower resale value, lower earning capacity, higher maintenance costs, shorter life span, etc.

And when I thought it couldn't get any worse, Turnbull pulls out this stunt.

What a monumental balls up from Turnbull.