$25 million study into NBN released

$25 million study into NBN released

McKinsey Study: The NBN can be built for $42.8 billion or less without Telstra

The Federal Government has released the $25 million KPMG McKinsey Implementation Study into the National Broadband Network (NBN), but will not reply to its 84 recommendations until the middle of the year.

According to the report, the NBN’s goals can be funded for up to $42.8 billion. The Government will fork out $26bn of taxpayer dollars by the sixth year of operations, of which $18.3bn will be required over the next four years. The full rollout will take eight years.

Completion of the NBN within this budget will not require a deal to be signed with Telstra for its infrastructure such as ducts or pre-existing fibre optic cable networks.

“Full Government ownership should be maintained until after the roll-out is complete,” the report said. “[The money] can be paid down quickly from then with investment-grade debt prior to privatisation.

"The NBN will be financially viable even without the participation of Telstra."

The study also recommended deploying fibre to 93 per cent of Australians, fixed wireless to 4 per cent and satellite services to the remaining 3 per cent.

Entry level wholesale prices on the fibre will be set at about $30-35 per month for 20Mbps broadband plus voice services. Next generation wireless and satellite services will deliver a maximum speed of 12Mbps.

“Backhaul costs are projected to be lower than initially estimated, with shorter total distance required and a lower expected unit cost,” it said.

The study also said it could start making positive earnings by year six and that the Government will completely cover the cost of its funds by the end of the rollout.

“The NBN business model establishes that taxpayers are paid back their investment with a modest return by year 15 of the project on the basis that privatisation is completed,” Minister for Broadband, Senator Stephen Conroy, said in a statement.

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Tags TelstraNational Broadband Network (NBN)KPMG McKinsey Implementation Study


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