Ambition Technology Blog

The National Broadband Network (NBN) is one of the hottest topics of discussion at the minute amongst MPs, Telecommunications companies, industry experts, and us the Australian taxpayers. On the 18th June the Senate Committee, tasked with investigating the Government’s NBN, called for a cost vs. benefit analysis of the project to be undertaken to determine whether it represented value for money for the public. In addition, many industry experts in the press have questioned the $17M of taxpayers’ money spent on the failed first tender, despite Communications Minister Stephen Conroy stating that this was “absolutely not” a waste of money.

These debates have been strongly contested by the opposing sides in the last year or so, however with the recent $11 billion deal between the Government and Telstra which a spokeswoman for the Communications Minister, Stephen Conroy, declared “… means the NBN can be built cheaper, quicker, with less unnecessary duplication, faster take-up of services and less overhead cabling,” it begs the question, have the Government turned the corner or is it still going to cost more money than it’s worth?

In a Sydney Morning Herald article on 7th May, 2010, an Optus spokeswoman was quoted as saying that “Today the average revenue per user is $110 for the combined line rental ($25), voice calls ($35) and internet ($50). Based on that and, on the estimated wholesale price, we expect people to be paying roughly the same.” This is in disagreement with Paul Budde, an independent telecommunications analyst, who said that “It will mean it will cost $30 to $35 to the wholesalers and $50 or $60 to retail for broadband and voice.” Also, despite the Government recently stating that the cost of the NBN will be considerably less than the $45M originally stated (down to around $26M now), Mike Quigley, NBN Co’s CEO could not conclusively say whether the project could be delivered at this budget and was quoted on the weekend as saying that “When it comes to cost you always have to ask at what point do you stop? It’s a very long-term project — money will be out into this network for years and years and years, as it is upgraded…We are developing our business case. We have not bedded down our figures”.

With these discrepancies in figures, the lack of a cost vs. benefit analysis of the project and the potential that the Network could be scrapped if the Opposition won power, is the NBN worth the money that is being spent on it?

What are your thoughts?