Telstra is expected to cautiously welcome NBN’s latest push into the business market, which is aimed at providing small business with fibre services at the same price as CBD services.
The behemoth doesn’t want to object to a $700m technology upgrade. But at the same time, Telstra already has circa 70 per cent of the small business market. So any move to put more business on better service also opens the door to rival retail competition .
Telstra and the other retail service providers have long complained about the cost of NBN services and today’s announcement doesn’t look like a cost cutting exercise.
On Wednesday Communications Minister Paul Fletcher will sing NBN’s praises in a National Press Club speech ahead of the NBN release of its latest corporate plan.
This will include the upgrade of residential services to curbside delivery with the promise of better service than the present fibre to the node delivery.
The latter covers a bunch of houses, whereas service to the node narrows the entry point to a few houses which should mean better service.
The real issue remains the NBN cost, which Telstra and others say is simply too high, meaning they can’t make any money from the service.
So the business rollout announcement is carefully worded to say NBN will use some of its $6.1bn in private debt to fund the rollout of fibre to businesses which want the service.
The on-demand bit is important because Telstra and the others were unimpressed at past NBN efforts to fast forward business rollouts to market directly to the big end of town effectively cutting the retailers out of the action.
NBN argued it was simply expanding the wholesale market.
The NBN has costs $51bn, of which $29.5 billion is equity, $19.5 billion in government debt and the rest self generated debt.
Eventually the plan is to sell off the network but this won’t come before its value is written down, which comes at a risk to the budget because right now it is held off the balance sheet.
This is because the NBN is budgeted to make a positive return. But a writedown would destroy that.
The post COVID world has bought us some strange bedfellows when you consider the government’s energy plan doesn’t mention the word coal and implicitly acknowledges the reality that renewables is the new base load power source.
Likewise, the NBN was always Kevin Rudd and Stephen Conroy’s flight of fancy. But now it is considered as a key communications provider in a COVID world.
So much so that Communications Minister Paul Fletcher will be singing its praises again while his former colleagues at Optus and Telstra gnash their teeth about delivery service and prices.
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