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

[Matthew Moyle-Croft]

Also,
Govt already promised to pay Telstra ~$11B or so to move customers
across - if buying Telstra and splitting it costs you that or less,
then you're winning.

On Sun, Sep 8, 2013 at 10:20 PM, Matthew Moyle-Croft <mmc at mmc.com.au> wrote:
> 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