Calls for the write-down of the National Broadband Network continue, with the latest coming from respected industry entrepreneur, Bevan Slattery, the founder of a number of highly successful telecommunications companies.
Slattery says that up to $30 billion needs to be slashed from the book value of the NBN if the network is to provide affordable services to the community.
With the NBN budget officially somewhere between $49 billion and $54 billion - and with the final cost likely to be somewhere north of $60 billion – Slattery is effectively calling for about a half of the cost of the project to be written off.
That would be a lot of taxpayers’ money going up in smoke – money that could have been spent on, say, hospitals or schools or……
But, says Slattery, unless that’s done the majority of households will only take up the lower speed tier packages, as they are now. And what’s the point of having a Gigabit network, if all people can afford is a 25Mbps services – or even a 12 Mbps service, slower than ADSL2+?
The pricing structure of NBN services has been a bone of contention within the industry for several years, but its full impacts are only now starting to be felt widely as the NBN roll-out and the take-up of services accelerates.
But even if pricing was restructured to make higher speeds affordable to Retail Service Providers and end-customers, there would still be a massive shortfall between what the NBN needs to make to be considered a commercial business and the revenues it can realistically expect to generate.
Commonwealth Finance Minister Matthias Cormann says there’ll be no write-down on his watch. But sooner or later either Labor or the Coalition will probably have to bite the bullet. It only depends on which party wins the 2019 election.