NBN deal done, what now?

NBN deal done, what now?

Summary: Telstra shareholders' acceptance of the NBN deal drags them kicking and screaming into the 21st century.


Telstra shareholders' acceptance of the NBN deal drags them kicking and screaming into the 21st century.

A few hours at the annual general meeting (AGM) was enough to convince anyone that Telstra and NBN Co both have a lot more explaining to do. The shareholders who took to the microphones talked about how the government had held the company to ransom and how they were begrudgingly accepting the deal, but you could tell they would rather things had stayed the way they were.

We listen in to some of the views expressed at the Telstra AGM in this week's Twisted Wire podcast. The NBN deal gives them cash flow to help develop new revenue streams, but what are they? Paul Budde talks about the sort of services they need to provide — we'll look more at the future shape of Telstra and other large telcos in a couple of weeks. If you'd like to add your views in the meantime, call the Twisted Wire feedback line (02) 9304 5198.

Also on this week's program, Paul Fletcher explains the reasoning behind his claim that the 12-month rolling plan of sites for the NBN has been politically motivated, which Senator Conroy has called "spurious and desperate".

Next week, I talk to Tom Mazerski, the new CEO of Primus. If you have a question you'd like to pose to him then leave a message on the Twisted Wire feedback line — (02) 9304 5198

Running time: 33 minutes, 10 seconds

Topics: Government, Broadband, Government AU, Telcos, Telstra, NBN


Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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  • ! was not dragged or screamed. You can start with Quigley's

    "NBN chief reveals home truths"

    AFR 20/10.11
    Vasso Massonic
  • Maybe 0.55% of Telstra shareholders are kicking, but 99.45% are cheering.
  • Who was dragged and screaming? The vote numbers say it all. roll up the shareprice, bring in the dividends.
    Knowledge Expert
  • Doubt

    I went along with the majority by voting chair discretion.

    It is pleasing to note that Quigley finally says it the way it will pan out.

    "Nobody will be interested in buying what is not just a loss-making business in the short-term but a loss-making business in perpetuity"


    "We've approached this as a project that's in the interest of the public good, not to maximises profits......"

    And so it should. Interestingly though, the NBN project is off budget on the basis that it's a profit making project. He evaded a question by Green's Senator Scott Le
    ludlam as to whether the network might be a liability rather tan an asset in the hands of a future government. No doubt, Swan will have some explaining to do down the track.

    Extracts, Courtesy: AFR 20/10/11
    Vasso Massonic
    • Thank you, Vasso, for giving me the chance to quote Mike Quigley's comments _in context_:

      Senator LUDLAM: What would you do? It is going to be losing a great deal of money. Presumably, the spending will immediately cease. I am wondering whether there would be any proposition at all that you could sell the network by approximately the state you would be up to by the middle of 2013 and make any kind of return for the taxpayer?
      Mr Quigley: Certainly some assets of the company would hold at that point, particularly related to the transit network and the backhaul, but neither the investments that have been made on fixed wireless nor the investments
      that have been made on satellite are money-making ventures. I believe that everybody is interested in providing a good solution to the bush and to rural Australia. This is the most cost-effective way to deliver the types of service
      that we have been set as an objective—12 megabits down, one megabit up. For rural people I do not see any cheaper way of doing that. I can only presume that someone would want to continue with that. The problem is: if you take away the other part of it, which is the fibre part, then you no longer can—
      Senator LUDLAM: You cannot cross-subsidise.
      Mr Quigley: cross-subsidise because it then has to stand alone. Nobody will be interested in buying what is going to be not just a loss-making business in the short-term but a loss making business in perpetuity.

      So there you have it. Only a "loss-making business" if you sell off bits of the assets without the ability to cross-subsidise. Mr Quigley goes on to point out the (fairly obvious) statement that the primary interest of the NBN is to be a project that's in the public good.

      That's actually the role of government, Vasso, not just to "make profits". If it were otherwise, then the government wouldn't actually feel compelled to spend tax revenues on roads and schools and such; it would just play the stock market to maximise its returns. Maybe some venture capital type investments, too. Essentially, it would just be a gigantic investment bank. Does that resemble the role of government to you?
      • Gwyntaglaw, You have me at a disadvantage. My post to Doubt pertains to extracts emanating from an article in the AFR 20/10/11 as indicated. The extracts are necessarily brief as allowable by copyrights.

        No doubt, you have access to the parliamentary committee transcript which I have now noted.

        The mixed signals I highlighted are still valid, and will become evident in the not too distant future.
        Vasso Massonic
        • perhaps instead of exclusively scouring the 'financial blogs' for info about comms, it may be prudent to 'also' check the comms blogs for comms info... rolls eyes.
        • The Hansard transcript of the Estimates hearing is here: http://www.aph.gov.au/hansard/senate/commttee/s380.pdf (pp130-131)

          The full text is far more informative than any analysis I have seen online.
          • ouch...!
          • Thanks. You are right, always more than one interpretation. Albeit, it does not seem a smooth passage for the NBN. Hope all goes well in the national interest.
            Vasso Massonic
    • Vasso: Talk about selective quoting mate. Really I'm all for having robust argument about the NBN but selectively quoting parts of what someone says *out of context* to try prove your point basically has the exact opposite effect: it makes you look like you cannot make a serious point against the NBN, and have to resort to deceitful behaviour like this. Is this your way of spreading FUD about the project? You've just decimated your integrity with that stunt or you have demonstrated that you have no capacity to actually understand what someone is talking about. People can be adversaries (eg. you vs Gwyntaglaw) and still have respect for the other person, but on this occasion you don't come out of it looking too flash.

      Gwntaglaw: Nice rebuttal. And I agree with you entirely.
      • Kevmeister, Further to my response to Gwntaglay.

        I suggest you read the AFR article.
        Vasso Massonic
    • now we are talking...LOL
  • no... now we are not talking eh vasmas?

    but that's conviction for you. you couldn't bring yourself to vote for the motion (following your years of nbn bad mouthing) and could finally recognise the lunacy in voting against it, so instead you threw your hands in the air and said..."whatever"...LOL
  • Paul Fletcher's reasoning is a bit stretched in trying to say the NBN rollout favour's one side (ALP) over the other side (LIB/NAT). If you lump all ALP seats + marginal LIB/NAT seats + other (IND) equals/ or should equal the other side.
    When add up the seats like that, of course that is not going to be equal in numbers.

    And in the 1st rollout the sites were chosen for the different type of conditions that NBNCo would face in the national rollout. EG old city infrastructure and roads, flats, multi story buildings, country areas and Telstra infrastructure.
    THese areas were used to plan the rollout and to see how the work should flow.

    And NBN were told to do country areas as well and all new housing areas. That was political, but the numbers in the House of Reps would be a major reason for that.

    NBN planning for the roll out is big and required to be detailed down to the ast centuremeter and a work in progress.
    How cold that be detailed in the 2010 business plan, as suggested by Paul Fletcher?

    Why does Paul Fletcher use the build cost figure of $50 billion and and the stated $27 billion. Is he just mistaken or is that just politics.