Industry pundits welcome McKinsey study
- 07 May, 2010 11:08
- Comments 4
Telco companies and industry analysts have welcomed the $25 million McKinsey Implementation Study as more evidence of the National Broadband Network’s (NBN) strength and viability.
The study said wholesale prices for 20Mbps speeds would be $20-25 per month for data only and $30-35 when voice services were included.
According to a statement from Optus CEO, Paul O’Sullivan, the release of the study was a major win for competition in Australia’s telco market.
“It’s long been our view that the NBN is economically viable and the release of today’s detailed study confirms this,” he said. “Most importantly the study has found that access to the network will be available to all Australians at a price they can afford, which is essential to the healthy take-up of services on the new network.”
iiNet CPO, Greg Bader, said the study was a strong step in the right direction The proposed increase of fibre optic cabling footprint from 90 to 93 per cent was a welcome surprise.
“The NBN guys aren’t silly and they know this thing needs to be priced sensibly,” he said. “The very clear message to come out of the report was the need for a wholesale model, equitable access for everybody and that’s fantastic.
“The slight increase in the footprint is fantastic, the reiteration they’ll target underserved areas first is also great so from what we’ve read it all looks positive.”
Internode general manager for regulatory and corporate affairs, John Lindsay, said it was unfortunate the report had taken so long to be released. But he said the study was well worth the wait and that the authors understood key concepts.
“I have to agree that [the NBN] is a very risky proposition for private investors because the Opposition has stated they don’t see this as the way forward,” he said.
Lindsay echoed the comments of some industry observers and Australian Greens Senator, Scott Ludlam, that the NBN should not be privatised and would best serve Australians in Government hands.
“It’s a massive network that connects everyone and the major danger is it won’t have enough pressure because it’ll be a near monopoly,” he said.
Independent telco analyst, Paul Budde, said the key for the Government was to respond clearly and promptly.
“If they do it right and pull it off the ground the plan could be an election winner. If not it could achieve the opposite,” he said in a statement. “The reason why a commercial roll out is not economically viable is that many of the national benefits of the NBN fall outside the balance sheets of private companies.
“It is therefore essential that the government takes the leadership role in this and that it is also prepared to take the risks, as it does in many other infrastructure projects.”
Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.
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Comments
Hmmmmm
Hardly a group of commenters without a vested interest - why would they not be glowing about a plan for the taxpayer to cover the cost and risk of their primary capital expenditure requirements? Cannot be cynical without a credible cost/benefit analysis I am sorry...
Yeah But..
@ Hmmm. How do you put a dollar value (and thus make a credible cost benefit analysis) when, as Paul Budde has voiced (and i agree wholeheartedly)
"many of the national benefits of the NBN fall outside the balance sheets of private companies."
Taxes, social benefits, as-yet-uncreated businesses which can only be feasible with nationwide, universally fast, utility priced data transfer (especially in regional areas where it could be argued they are most needed) - again, delivering more taxes.
That's what governments are there for - to pay for the things which just aren't economically viable.
And seriously? Anyone who thinks this thing won't make a packet for the country over it's lifetime is blind. Who cares if it doesn't return positive for 10 years. Or 15?
If done properly, this thing should be legislated to MINIMISE profit (thus keeping it safe in public hands since it won't be attractive to private investment).
The benefit of public utilities falls way outside the direct economics which private organisations run under - but ask yourself this:
If our utilities weren't a nice earner, why would they have been privatised in the first place?
To put it more simply - is it better to sell golden eggs, or to sell the chicken that lays them?
RS
Agree Yeah But...
Hmmmm says hardly a group without a vested interest.
But speaking of vested interests, had these same groups bagged the study, I'm sure Hmmmm would have been here giving them complete credibility, banging his chest and saying " there, told you so"... lol
Some people eh?
Dave
Gotta agree with John Lindsey .. What is the point of building another Telstra (Telstra 2.0!) in order to simply allow it to behave like the existing monopoly Telstra?
The model should be more like the privatisation of the electricity industry - where the generators (like ISPs) were spun off, but the grid (i.e. network core) remains as a publicly-held entity (Transgrid).
The NBN should be a core and a peer point and should remain in public hands with a charter to facilitate access and promote connectivity and competition.
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