The following piece by Paul Budde foreshadows a ‘white knight’ role for Telstra when NBN fails. He says:
We are now getting a second-rate network and the first signs from customers, as we heard in a recent Senate Hearing, are not good. This is in line with our assessment. An MtM network, by its very nature a mesh network, will not be able to deliver consistently good quality services to all customers. Telcos and ISPs are not happy with the second-rate system and want to bypass the NBN with their own fibre and mobile services. And there has been dead silence from the government on the potential economic role the NBN has in relation to innovation, healthcare, education and so on. Belatedly the NBN company is now arguing that the NBN debate should move from politics and focus on what we, as a nation, want from it. …
The white elephant scenario that the government is now pursuing will see the NBN fail, as it is not future-proof and consumers and businesses will want a better network. In other words, large parts of the $50 billion+ investment in the NBN will not be valued by the market at the time of sale – that is if the government relentlessly and single-mindedly pursues its MtM NBN.
This piece was first published in budde.com.au on 19 February 2016. For the complete article, see link below:
http://www.budde.com.au/News/#Building-Australia’s-white-elephant-cheap-buy-for-white-knight-Telstra
Paul Budde specialises in the strategic planning of government and business innovation and transformation around the digital, sharing and interconnected economy.
Comments
2 responses to “Paul Budde. Building Australia’s white elephant – cheap buy for white knight Telstra.”
Whaling Road, North Sydney, is a pleasant short street about 250 metres long with 56 houses along it. At the end of the street is a large residential tower of about 20 storeys. There are about 80 apartments in the tower. NBN spent some time installing fibre along the whole length of the street to the apartment tower. The fibre passes all of the houses in the street but was not connected to any of them despite requests from residents. Presumably the residents of the houses will later see the installation of an NBN cabinet in Whaling Road and they will be connected to the network via the old copper Telstra wires. In the meantime, the apartment tower enjoys fibre – a classic example of the sort of cherry picking that the NBN corporation is undertaking. This means that in this single short street, there will be 80 residences that will enjoy the speeds and capacity of fibre while their neighbours may only get the second rate and slower copper wire service and the maintenance commitment that goes with it.
Paul doesn’t mention a couple of key points:
Firstly, anyone who has been in the customer install game (eg. ex-iiNet John Malone to name just one) recognises NBN had totally underestimated the cost of going into people’s actual homes, especially units (just ask Foxtel or Optus how hard this is).
Secondly, Paul in his steadfast support for the NBN neglects to mention his inherent conflict of interest in that he chooses to run a telecommunications consultancy from a rural area that is un-economic for any commercial operator to provide broadband services.