NBN payments to Telstra could hit AU$98 billion: Report

NBN payments to Telstra could hit AU$98 billion: Report

Summary: NBN Co could ultimately end up paying Telstra AU$98 billion over the next 55 years in lease payments for ducts, dark fibre and other telecommunications infrastructure, according to a report.

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NBN Co could ultimately end up paying Telstra AU$98 billion over the next 55 years in lease payments for ducts, dark fibre and other telecommunications infrastructure, according to a Communications Day report.

The report sighted advice given to the former NBN Co board by Goldman Sachs in May 2013 that stated NBN Co would be required to pay Telstra AU$98.159 billion between 2011 and 2067, with the majority of payments due to Telstra for leasing its ducts, pits and pipes for the National Broadband Network (NBN) infrastructure.

Telstra has always reported the value of its deal with NBN Co to lease its infrastructure and migrate customers onto the NBN as being a net-present value of AU$11.2 billion, but through the leasing arrangements, NBN Co's payments to Telstra will increase over time as the network expands. The report stated that payments to Telstra will rise from AU$400 million this year up to AU$2.9 billion in 2067.

The Goldman Sachs report also was reported to state that the Coalition's proposal to use Telstra's copper, and HFC networks as part of its multi-technology mix approach, which was signed off last week, would add AU$2.4 billion to the value of Telstra's AU$11.2 billion deal.

Communications Day today also reported that the former Labor Cabinet was warned in 2011, shortly after the passage of laws designed to prevent infrastructure operators from cherry-picking high value areas, that the laws did not adequately address cherry-picking behaviour which was likely to pop up during the early rollout stages for the NBN.

The Federal Government is likely to address whether TPG will be allowed to proceed with its cherry-picking plans to roll out fibre to the building services in 500,000 metropolitan apartments in the next few months.

Topics: NBN, Government, Government AU, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • HMMM

    Didn't ownership of the pipes and ducts transfer to NBN after 30 Years in the contract?
    What is the annual cost of repairing maintaining and remediating that infrastructure. ?
    If NBN is to take over the infrastucture and copper it will of course have to take all the staff, equipment and stores and operating systems as well ( saves Telstra paying the redundancy payments). All those complaints about the incompetent Telstra field staff, having to wait for an ex Telecom Tech or Liney contractor to find and fix the problems, guess what now NBN's star staff.

    That $98Bill over 41 years will look like small change, but then it fails to factor the 30 year from 2012 and the maintenance, operational and fault repair costs and the asbestos clearing costs.

    Sort of like removing the "Carbon Tax", but keeping the compensation package to business and citizens - over $1Bill a year that was funded from the Carbon Price, now from the taxpayer, to give the political illusion of massive savings to all by killing the Carbon Tax. Budget emergency ???
    Not forgetting all that asbestos is now the Taxpayers problem and liability, (see avoid the problem issues and your government mates will bale you out)
    Abel Adamski