Senate calls for NBN operating plan

The upper house of parliament has demanded to see NBN's financial forecasts and rollout plans after the corporate plan was unveiled last month.
Written by Corinne Reichert, Contributor

The Australian Senate has called on the government to reveal plans and financial forecasting relating to the National Broadband Network (NBN) after the corporate plan last month revealed that the project could cost up to AU$56 billion in peak funding.

Senator Stephen Conroy, who held the communications portfolio previously, on Thursday won a majority in the upper house to request the operating plan in NBN's 2016 corporate plan, along with the financial forecasts for the project until 2022.

The company rolling out the NBN last month released its three-year corporate plan, revealing that the peak funding cost for the project will reach between AU$46 billion and AU$56 billion, with a base case peak funding target of AU$49 billion.

It also said that earnings before interest, tax, depreciation, and amortisation (EBITDA) would continue falling, from the AU$1.5 billion loss announced for FY15 out to a AU$2.9 billion loss for FY18. Cash flow is also forecast to decline as capital spending ramps up, from the AU$4.8 billion loss reported for FY15, down to AU$9.7 billion forecast for FY18.

Average revenue per user (ARPU), however, will increase from AU$40 in FY15 up to AU$44 by FY18.

The Coalition's so-called multi-technology mix (MTM) NBN model aims to cover 20 percent of the Australian population with fibre to the premises (FttP); 38 percent with fibre to the node and fibre to the building (FttP/B); 34 percent with hybrid fibre-coaxial (HFC); 5 percent with fixed wireless; and 3 percent with satellite services.

Communications Minister cum Prime Minister Malcolm Turnbull claimed at the time that despite the escalating amount of funding needed for the project, it would still cost less and be delivered faster than Labor's full fibre-to-the-premises rollout -- which was spruiked heavily by Conroy during his time as minister for communications.

"The corporate plan shows that the multi-technology mix remains the most cost- and time-efficient means of completing the NBN, delivering upgrades six to eight years sooner, and at around $30 billion less cost than an all-fibre to the premises alternative," the then-communications minister said in a joint statement with Finance Minister Mathias Cormann.

"The government's broadband policy is technology agnostic. NBN Co is free to use whatever mix of technologies is required to get the job done as quickly and cost-effectively as possible. The company therefore has, in the light of its extensive experience building FttP, determined what the peak funding requirement and time to complete would be for an all-FttP build.

"The company's conclusion is that an all-FttP approach, as proposed by Labor, would have a peak funding requirement of $74 billion to $84 billion and would not be finished until as late as 2028."

The government has until October 12 to also table a ministerial letter to the company requesting an analysis of a fibre-to-the-premises, fixed-line NBN deployment.

With AAP

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