NBN Co business plan details expected costs

25 Nov 2010

Australian fixed line incumbent Telstra will receive around AUD14 billion (USD13.7 billion) over the next 30 years from the public-private company set up to oversee the country’s National Broadband Network (NBN) project, NBN Co, in decommissioning and leasing payments, according to the Sydney Morning Herald. Citing the business plan recently released by NBN Co, the report reveals that NBN Co has calculated that it will pay Telstra AUD13.8 billion by June 2020 to decommission the copper network and transfer customers onto its own fibre network, with a portion of the funds also paying for access to Telstra’s infrastructure, such as ducts and existing fibre networks. NBN Co’s strategy document also reveals that it expects network construction costs to total around AUD37.5 billion. Detailing the agreement between Telstra and NBN Co, the business plan notes: ‘This deal reduces the overall CAPEX due to the efficiencies as a result of the reuse of infrastructure and also the use of longer term leases … As a trade-off, operational expenditure costs are higher in a deal scenario … due to the higher use of Telstra’s infrastructure as well as the acceleration of customer take-up generated by the deal.’

The public release of the plan has also improved the chance that legislation pre-empting the structural separation of Telstra could yet be passed by the Senate; as reported by CommsUpdate earlier this week it had been reported that key independent senator Nick Xenophon had suggested he could press to defer a vote on the proposals until after the release of the NBN business plan.

Australia, NBN Co, Telstra (incl. Belong)