[AusNOG] NBN - Negotiations with Telstra - update from DeLimiter

[Matthew Moyle-Croft]

On Sun, Sep 8, 2013 at 8:29 PM, Martin - StudioCoast
<martin.sinclair at studiocoast.com.au> wrote:

> What are others thoughts on this? What other cost saving measures are out
> there?
>

Go the insane private equity (but government) approach:

1. Borrow money from markets on short term basis to repurchase Telstra
from existing shareholders. (need AU$60Billion + premium).
2. Break Telstra down into component parts - including one
owning/running the last mile (Cu, ducts, Exchange buildings, HFC etc).
"InfraCo"
3. Sell all the bits other than InfraCo - probably worth about the
right amount to pay back money borrowed as no longer encumbered with
ugly bit of last mile that needs mucking with, if not, lumber Infraco
with the debt.
4. Setup InfraCo to do what it needs to building whatever you need to
build.  It owns everything it needs and is govt owned.  No negotiating
with anyone.  Don't have to argue about technologies etc.  It can have
a look at what it's got and do what it needs to do relative to a
political dictum about services it needs to provide.

So, money's pretty cheap to borrow internationally for short term.
Australia has AAA ratings so borrowing it should be pretty
straightforward.  InfraCo remains initially government owned so AAA
rating is fine.

Given the "cost" is really just what the difference is between
acquiring Telstra and then selling the bits InfraCo doesn't need it's
probably cheaper.  Infraco starts with a customer base so you just set
it up so it can afford to roll out high speed over X timeframe.  Also
means that if you want to sell it then you have no issues other than
selling a govt monopoly which is a problem we already have.

MMC