NBN roll-out rejig adds no cost: Conroy

NBN roll-out rejig adds no cost: Conroy

Summary: Despite the government prioritising regional areas of Australia for early phases of the roll-out, the cost for the National Broadband Network (NBN) will not increase, according to Minister for Broadband, Communications and the Digital Economy Stephen Conroy.

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Despite the government prioritising regional areas of Australia for early phases of the roll-out, the cost for the National Broadband Network (NBN) will not increase, according to Minister for Broadband, Communications and the Digital Economy Stephen Conroy.

Stephen Conroy

(Stephen Conroy on Lateline screenshot by
Josh Taylor/ZDNet Australia)

On ABC's Lateline program last night, presenter Tony Jones expressed concern that since there are less people in regional areas, initial revenues from people taking up the broadband service would be low and might raise the cost of the project as a whole.

However, Conroy denied that rolling out the NBN to regional areas first as part of a deal to secure the votes of Independent MPs Rob Oakeshott and Tony Windsor would add to the $43 billion expected cost for the project.

"Look, not at all. What we're talking about with the Independents is the priority of where we roll it out," Conroy said, highlighting regional areas were already included in the first two phases of the roll-out. But Conroy stated that the next sites to be picked might be different to what was originally planned.

"And what we will be talking to NBN Co about in the next few days is instead of starting one maybe in the centre of Melbourne, we would actually do one in, picking a town, Wodonga. Instead of starting in Brisbane, we might do Mackay," he said.

Conroy also said that Oakeshott and Windsor hadn't negotiated special roll-out times for their electorates as part of the deal.

"The Independents did not put forward any plan whatsoever to prioritise their own electorates. I think what attracted them to the National Broadband Network was that this was a national benefit to all of regional Australia," the minister said. "They did not ask for nor did we give them any commitments about being focused in their individual electorates."

Conroy offered a new benefit for rolling the network out to regional Australia first, that of better organising population density across the nation.

"If we are able to deliver the services into regional Australia that are equivalent to those that they get in the city, we will begin to get a better distribution of population," he said. "We can take the pressure off the cities. We have the capacity for the sea change and tree change communities to be able to do that and still access those services."

Telstra customers key for initial revenue

Conroy said the $11 billion deal with Telstra to gain access to its existing infrastructure would see its customers provide a key stream of initial revenue to the project that would encourage private investment in the $43 billion project.

"So they in [the McKinsey] report said to us it should be $27 billion [in government investment] that allows us to complete the build and then with the revenue streams that would be coming in, particularly with the new Telstra deal, we get revenue from day one as we start bringing Telstra customers over onto our network, would allow us then to start [seeking private investment]."

Topics: Broadband, Government, Government AU, NBN

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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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12 comments
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  • Thanks to Conroy's stubborn bl**dymindedness, we'll never know whether it will cost *more* money, because he refuses to reveal the cost and return for the whole project in the first place.
    Pachanga-4184c
  • Well id rather see the 40 billion put into making my trip to work 20 minutes faster and reducing the price of houses so that i can actually afford one to put the internet into.
    rbosward
  • And I'm sure you deserve $40B spent on you and whatever you want, while the rest of the nation goes without...
    RS-ef540
  • Ummm, from the initial announcement in April 2009, Conroy said $43B maximum cost, JV between government and private sector. Which part of that hasn't been revealed?

    Since then, projections have put the government's costs at $26B and the return, will be greater than most, if not all other governmental spending.

    So what's the problem, seriously? I'm somewhat perplexed by the incessant mis-information, portrayed for whatever reason!

    Sure if your against it for whatever reasons thats fine, but why the FUD?
    RS-ef540
  • If the NBN is fully implemented, depending on your line of work, you may not need to drive to work at all, instead work from home.
    JackDore
  • Why do I not think the whole privatisation of Telstra wasnt such a great idea in the way they did it? Telstra has at this time assets totalling around $38b (including offices, vehicles, etc) yet the government is happy to pay $11b just for access to some of the network? The only thing of any potential future value looks to be Telstras mobile network. Dont get me wrong I am all for the NBN but wouldnt it be better for Telstra to just sell the cable infrastucture part of the business and keep the wireless. Once the NBN is online there will be no need for phone lines or even pay tv cables tho I think keeping TV seperate would be the smarter thing to do for the time being.
    nissy-2f939
  • Bring on the NBN, i can't wait till they bring out a Teleport application where i can teleport myself around the world at the speed of light.
    Salami Chujillo
  • Even better, teleport to my boss's office right behind hime, wack him over the head and dissapear back to my place. Man i can't wait.
    Salami Chujillo
  • How much do you think those ducts are worth? Just imagine the cost involved in digging your own trenches around the whole nation. I don't think this is about the cost of the copper, it's about the cost of labour and materials required to create ducting for the fibre.
    Kevmeister
  • Announcing a maximum cost does not equate to any form of budgetting one would expect from any professional Project Manager, particularly when it involves a $43Bn expenditure.

    Plucking a figure of $43Bn and announcing that to the public is not a responsible form of disclosure. It's the outright refusal to prepare any detailed costings that's 'stubborn bl**dymindedness'.

    Projections are not detailed costs estimates, and similarly a projected return of $26Bn can hardly be taken seriously. Any CEO in the world presented with blanket statements and figures like this (with no detail to back it up) would laugh and fire everyone involved!

    What's the problem? Every figure quoted so far is based on Conroy plucking a figure out of his A**. There is ZERO evidence to support his claims for this project.

    Why the FUD? When a public servant embarks on Australias most expensive project ever the tax payers are entitled to know that appropriate professionalism, accountability, and due dilligence is being applied. Conroy has made it perfectly clear he's not accountable to anyone and continues to act in a manner no one would ever tolerate. You could save a lot of money by replacing Conroy with a 'Magic 8 ball' decision maker...
    Scott W-ef9ad
  • Isn't this exactly what Conroy is doing, spending $43Bn on whatever he wants....
    Scott W-ef9ad
  • Pretty sure they are going to hang it like foxtel in suburbs with poles. only those new subdivisions in McMansionville will get dug up.

    The porblem is not the cost. Its what they are going SPEND. 43Bill. This is NOT how much it will cost. No. Not at all. This is how much they say they are going to SPEND. See the difference?

    They have no clue how much it is going to cost that is why they havent done a "Cost Benefit Analysis". But if they cant get it all done with 43bill they can just borrow a few more billion. ezy. no need for a CBA.
    walmillard