Industry pundits welcome McKinsey study

Industry pundits welcome McKinsey study

Analysts and telcos say it's further proof of the NBN’s viability

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.”

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Tags iiNetinternodepaul buddeSenator Scott LudlamMcKinsey Implementation studyNational Broadband Network’s (NBN)


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