Published on the 22/02/2016 | Written by Beverley Head
A national infrastructure review has recommended the National Broadband Network Company be privatised “in the medium term” with a multi-billion dollar price tag tipped…
In a sweeping review, Infrastructure Australia has recommended that NBN Co be “transferred to private ownership”. It has always been on the cards since the NBN was first mooted back in 2009 and was again canvassed in the 2014 Vertigan review of the organisation.
Recommendation 6.9 in the Australian Infrastructure Plan says that; “NBN Co should be privatised into an appropriately regulated market in the medium term. In the near term, the Australian Government should commission a scoping study to assess the most appropriate approach, structure and timing to deliver a privatised NBN model. The scoping study to assess the most appropriate approach and structure for a privatised NBN should include options to efficiently support delivery of NBN services in regional and remote areas that are non-commercial.”
Delivering better telecommunications to rural and remote Australia is a focus of the infrastructure report which also recommends that barriers be removed for mobile communications companies wanting to set up operations in such areas. To spur that the report suggests a possible rethink of the Universal Service Obligation, and also making the NBN backhaul and tower network available to mobile operators willing to offer services outside the major metropolitan areas.
As to the windfall Government might expect to reap from the sale of NBN Co, an accompanying report from PwC has suggested that a figure of $27 billion “seems plausible”. While Infrastructure Australia has not explicitly set a timetable for the sale, the PwC report indicates that 2024-25 is most likely. It has also forecast that NBN Co could expect a five percent productivity lift once sold off.
Telecommunications analyst Paul Budde however has weighed into the debate, describing the NBN as a “white elephant” which is not future-proofed despite the $50 billion investment by the Government.
“We believe that there will be only one potential buyer for the mesh/mess NBN and that will be Telstra, one of the most successful and richest national telcos in the world. They will never pay the full price for the NBN and because of the NBN mesh it is highly unlikely that any other company will pay such a price for the infrastructure. It is even questionable if they will be willing to pay the price of around the $27 billion price tag.”
Ahead of any sale, NBN Co could face a “completion review” – another innovation proposed in the Infrastructure Australia report. Besides assessing performance against budgeted time and cost, these reviews are intended to “assess whether the demand projection underpinning the project’s development were robust” and what benefits materialised.
That presumably will determine whether or not the final network is or is not a white elephant.
While the NBN Co sell-off is the most significant ICT recommendation from the report, it also makes clear the significant role that technology will need to play in order to leverage efficiencies in utilities and transport infrastructure. Peppered through the report are recommendations that sensors and IoT-style deployments are rolled out nationwide to collect data and provide greater insight about the way in which infrastructure is currently being used, and how it might be optimised.
