Is Macquarie Asset Management running a ruler over NBN Co? According to sources they are.

The Australian business that recently teamed up with Nippon Telegraph and Telephone to jointly own data centres in Europe and the U.S, has also teamed up with a former Prime Minister in an effort to sell the deal to an incoming Federal Government according to sources.

The move, if it goes ahead, will deliver a major income boost to the coffers of a Federal Government after the election and help reduce debt.

Currently NBN Co still has $7.4 billion of government debt to repay by June 2024

According to sources Macquarie is keen to grow their portfolio of data centre and network assets which is why they have recently teamed up with Japanese business Nippon Telegraph and Telephone.

Under their agreement, Macquarie will acquire a majority of shares in companies that own NTT data centres in Europe and the U.S. for around $1,088 Billion with the Japanese group maintaining stakes of 25% and 49%.

NTT assets in the U.S. and Europe will switch to joint ownership with Macquarie, while the Japanese telecom powerhouse will operate and maintain them.

What’s not known is who would operate the NBN with speculation that Macquarie could bring in a partner for the deal.

NTT is the world’s third-largest data centre operator with the joint venture with Maquarie seen as a way for both organisations to quickly expand their telecommunication and data centre assets.

According to Nikki Asia NTT is set to double its investment in data centres between fiscal 2021 and fiscal 2025 in partnership with Macquarie, with insiders telling ChannelNews that this could also result in a move to take control of the NBN.

Macquarie, with some $531.7 billion in assets under management as of September 2021, is seen as an ideal organisation to take over NBN Co.

Recently NBN Co chief executive Stephen Rue says the national broadband network is and will stay the “digital backbone of the nation” even as competitive threats circle from private investors, international billionaires and other telcos emerge.

NBN Co said it connected 200,000 more premises to the national network in July-December, bringing the total premises connected to 8.4 million.

In the financial year ended June 30, NBN Co reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.35 billion. But in the first six months of financial 2022, it recorded EBITDA of $1.5 billion.

If Macquarie were to take the controlling stake in NBN Co they are facing competition from Telstra’s $1.6 billion fibre-and-satellite project, Bevan Slattery’s Hyperone network and Elon Musk’s low-orbit, satellite operation Starlink which have been helping the Ukrainian war effort against a Russian invasion.

Rue said recently “The NBN is absolutely the digital backbone of the nation. We will continue to monitor any new investments made in the sector, but I think what is lost in this conversation is that throughout this decade we are going to see the ongoing digitisation of the economy and businesses and increasing demand for broadband.”

The comments came as the government-owned entity said it boosted earnings by nearly $1.1 billion in the six months ending December 31.

In the period, operating costs and subscriber payments fell sharply, surpassing the full-year earnings figure posted in the 2021 financial period.

NBN Co said new customer acquisition and demand for higher speed tiers were the bedrock of the result, which also led to its long-stuck, per-user revenue – a closely watched figure in the telecoms sector – rise to $46 from $45.

Mr Rue said the national network was “financially sound and sustainable” and on track to meet guidance laid out in its stripped-back 2022 corporate plan, which is key to it avoiding a write-down hurting the federal budget.

“We have built a strong, resilient, secure and stable network that has proven its worth, particularly over the last two years,” Mr Rue said in a statement.

Overall, the entity lifted revenue 12 per cent to $2.5 billion in July-December.

Subscriber costs paid to Telstra and Optus for moving customers off their network and onto the NBN fell to $126 million from $809 million.

“The strong result was underpinned by the acquisition of new customers and strong demand for higher speed broadband plans,” said NBN Co, which connected 200,000 more premises to the national network in the period, bringing the total to 8.4 million premises.

NBN Co still has $7.4 billion of government debt to repay by June 2024

The government’s equity funding in NBN Co is capped at A$29. 5 billion by an equity funding agreement.

The government has guaranteed some of NBN Co’s lease obligations, but the guarantee will fall away once it achieves an acceptable investment-grade credit risk.