[AusNOG] ALERT: Aust Govt will build National Broadband Network, no company will be awarded the tender.

Rick Jones rick at toplevel.net.au
Wed Apr 8 08:01:08 EST 2009

And then you have to factor in the fact that the government will be
subsidising this to some extent.  The country is looking for major
nation-building infrastructure projects and we all knew that the NBN was
high up on the labour party's agenda.

Personally, as a taxpayer, I'd rather see the money go elsewhere.  Because
we are going to be paying this debt off for some time.

But, from an industry perspective, isn't this what most of us wanted?

Call it Telstra Mark II.  Call it what you like.  But anything that
fast-tracks fibre rollout in Australia and does it purely at the wholesale
level with open access for everyone at an equal level.  Sounds like
Christmas to many of us.

I do feel sorry for the participants in the RFP, who genuinely thought that
they had a chance of doing this themselves.  But, as I read the
announcements, the government doesn't have the expertise to do this
themselves and need the industry to do it.

So I vote for optimism.


-----Original Message-----
From: ausnog-bounces at lists.ausnog.net
[mailto:ausnog-bounces at lists.ausnog.net] On Behalf Of Tony
Sent: Wednesday, 8 April 2009 7:21 AM
To: ausnog at ausnog.net; lists
Subject: Re: [AusNOG] ALERT: Aust Govt will build National Broadband
Network, no company will be awarded the tender.

It all depends whether you want to be optimistic or pessimistic about it.

Uptake is an issue, but on the subject of price I don't think the final
figures you've quoted are unreasonable ($80-$100 per month).

If you look at Internode's current FTTH offering as an example:

The base plan (25/1Mbps, with 5GB quota) is $50pm. I believe this includes
NodePhone (SIP phone service), but if you want a traditional PSTN interface,
that is an extra $25pm. That's a total of $75 per month.

If you want to really start playing with figures, you can factor in
inflation. If the debt is taken out in todays money, but repaid in the
future it works to your advantage. $75 today at 3% inflation is $95 in 8
years time when it's finished. If you extrapolate that to your 40 year
payoff period (48 years from now, allowing 8 years to build), then it
becomes $310 per month. As long as you pay the interest only on the debt,
the debt doesn't increase.


(If I've got any of my figures wrong, feel free to correct me, it is early)

--- On Tue, 7/4/09, lists <technical at halenet.com.au> wrote:

> From: lists <technical at halenet.com.au>
> Subject: Re: [AusNOG] ALERT: Aust Govt will build National Broadband
Network, no company will be awarded the tender.
> To: ausnog at ausnog.net
> Date: Tuesday, 7 April, 2009, 8:33 PM
> Hi All,
> I don't like to be a wet blanket however personally I don't
> see how this can 
> be based on a viable business model.
> $43, 000 million is $2000 per Australian  ouch. 
> It would be to depressing 
> to dived the number by the number of tax payers
> using rounded figures there are about 10 million homes
> =  4300 per home investment
> assuming ever house 1. uses the internet and 2. takes up
> the service and 3. 
> a 40 year payback period with a  7.5% return (very
> long given the 
> electronics will have a lifespan of 10 or so years) then
> the business will 
> need to charge at least $28.30 ex to pay for the
> investment. plus add 
> running costs margin etc etc.  So I guess there will
> not be any change out 
> of $40.
> The above is so totally unrealistic
> It is more likely the internet penetration is around 50% of
> which x% will 
> want a fixed connection.  So best case is the monthly
> fee will need to be 
> twice the $28.30 at least = 56.50 +
> GST.   How many customers want to pay 
> $80 to $100 per month for broadband? If there is not a
> large take up the 
> figures simply get worse
> of the 50% some will use mobile broadband
> All this equalls a bad investment.   There
> should be more emphasis on 
> filling black spots were there is a need/demand than
> wasting money 
> duplicating existing infrastructure.  While some may
> believe it will bring 
> Telstra to heal I doubt it.  This could end up being a
> white elephant, 
> especially if Telstra decides to build FTTH and other
> retail operators 
> decide to build out there own networks.  Then there is
> the issue of what it 
> will do to the business models of companies that have
> deployed ADSL 2+ 
> dslams.  What a financial mess, perhaps sanity will
> prevail. Perhaps the 
> government will buy back all the Telstra shares and
> restructure it to what 
> they want.  Who knows?  This decision seems
> rushed and ill thought out
> Regards
> Tim


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