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NBN A $50b Broadband Monster Secret New Report Reveals

The report obtained by the Australian newspaper was prepared by Labour’s own corporate advisers, Greenhill Caliburn Communications.

Communications Minister Stephen Conroy has defended the project saying the government believed it would “deliver significant benefits to all Australians in the key areas of health delivery, educational services and new business opportunities”.despite the fact that the report claims slower-than-expected development of digital video content could put at risk the financial returns from the network.

Conroy has not presented any solid data to support his claims that the network will be successful, with observers claiming that Conroy will be “long gone” when it comes to accounting for the cost of the network in 2020.

The report  reveals that $50.6bn in capex would have been spent on the network by 2028. Originally Conroy put the the bill for network at  $35.9bn in capital costs with the network being completed by December 2020

The Australian said “As well as warning of a “potential consumer pushback” to the NBN’s assumption that it can charge more for higher speeds, the report says the model was abandoned by Korea Telecom — and Time Warner Cable discontinued trials of the model in the US.

The document shows Greenhill Caliburn said slower digital video could “adversely impact” the number of users attracted to and retained on the NBN, as well as growth in the average revenue per user. It also cites estimates that 1 per cent of Australians have internet-connected TV, 62 per cent have taken up broadband and 31 per cent have taken up pay-TV. This compares to levels of 14 per cent, 70 per cent and 85 per cent in the US.

The report reveals that despite Labor’s insistence the NBN is “future-proof” it will require about $14.7bn in capex spending between the finish of the project in December 2020 and the 2028 financial year. Ms Griffin said network equipment would have to be upgraded over time.

To see the full Australian story go to this link.