nbn’s wireless network levy play
- 23 October, 2017 11:06
Bill Morrow, the CEO of nbn, the company behind Australia’s National Broadband Network (NBN), has raised prospect of a wireless broadband network levy to help prop up the finances of the national network.
In an interview with Fairfax Media, Morrow suggested that the Federal Government’s so-called ‘broadband tax’ proposal is that it doesn’t include wireless networks.
"The problem is the levy excludes wireless, even where people never take the modem outside of the house," Morrow told Fairfax Media. "It's a threat that wasn't envisaged by this government or the last when the business plans were put together."
The Telecommunications (Regional Broadband Scheme) Charge Bill 2017 was introduced into Parliament by Minister for Urban Infrastructure, Paul Fletcher, on 22 June.
If it is passed into law, the Government’s proposed broadband levy legislation will see fixed-line broadband service providers slapped with an additional charge to help cover the operating costs of the NBN fixed wireless and satellite services.
Already, nbn has suggested the proposed legislation be expanded to include services provided to businesses as well as consumer customers of the network.
Now, according to Fairfax Media, Morrow is suggesting that "things are going to have to happen”.
“The government has two options: to regulate to protect this model, or to realise that the NBN won't have the finances it thought and might require some off-budget monies to go in to make it happen,” he said.
On 23 October, Prime Minister, Malcolm Turnbull, clarified some of Morrow’s comments regarding wireless networks and whether they should also be charged a levy to help prop up the NBN.
“What Bill Morrow is talking about in terms of wireless is more enhanced antenna services, you know, in large multi-dwelling buildings, apartment buildings,” Turnbull said on ABC News 24, referring to services provided by the likes of BigAir, which provides network services from its own national fixed wireless network to more traditional cable-based solutions.
Asked if mobile network data users will be penalised in any way to pay for the NBN, Turnbull said that there was “no plan” to impose any restriction on mobile data of the kind delivered by the country’s mobile network operators.
It remains to be seen whether the Government will expand the current "broadband tax" proposal to also encompass wireless services, such as those provided by BigAir.
The comments by both Morrow and Turnbull come amidst the background of Morrow’s admission that the NBN is losing money on millions of the connections it builds around the country.
“Well we know that there's about two million of the 11 million homes in the country that are not economically affordable to be able to build out to, but we take the losses in those areas, we offset those losses against the profits that we make in the city centre areas where they're far cheaper to build, where we actually have a higher profit margin,” Morrow told ABC Radio’s AM program on 23 October.
“And when you add everything up, that's why we're able to make a very modest return, yet still get everybody access to fast broadband and keep the prices reasonable,” he said.
At present, however, nbn has been struggling to get its all-important average revenue per user (ARPU) figure up to the $52 per user per month level it needs to break even.
"We collect about $43 per month from retail service providers for each home they sell into," Morrow told Fairfax Media. "In order to recover costs we need $52."
At the same time, nbn has released data highlighting just how expensive some premises are to connect to the network, revealed the top ten most expensive fibre-to-the-premises (FttP) connections in every state.
Among them was a figure of almost $92,000 to connect a house in Tasmania.
The release of the new data comes as nbn announces the activation of its first fibre-to-the-curb (FttC) technology-connected premises in Coburg, a northern suburb of Melbourne, in a move likely aimed at shoring up support for the current multi-technology mix (MTM) rollout of the network.
The FttC connection technology is anticipated to be better value for money than the previous Government's preferred FttP technology.
Meanwhile, Turnbull has also conceded that nbn appears to be in a less than ideal position financially, a view mirroring that of Morrow, if the CEO’s latest comments to Fairfax Media are anything to go by.
“At the moment, it is estimated to deliver a return of around 3 per cent, which is not - it is enough to keep it on the government's balance sheet, as a government asset, but it certainly is not a commercial return that the stock market would expect,” Turnbull said on ABC News 24.