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More questions than answers on private sector involvement in NBN

September 20, 2013

TPG’s announcement on September 18th that it plans to build its own fibre broadband network in densely populated urban suburbs, adds a new dimension to the puzzle of what will be the revised role of NBN Co under the Coalition Government.

TPG will use the PIPE fibre network it purchased in 2010 to run fibre to the basement (FTTB) of multi-dwelling units (MDUs). It has revealed that these FTTB plans would likely cost around $70 a month on a 24 month contract, with a $129.99 setup fee, for unlimited downloads, local and national calls at 100 megabits per second. It will also offer its network for wholesale.

It is difficult to imagine why NBN Co would overbuild FTTN in the areas served by TPG’s FTTB, which would probably mean NBN Co pulling out of these urban areas. However, as these areas are likely to generate the highest demand and willingness to pay for high speed broadband across the country, NBN Co’s revenues will almost certainly take a hit.

Last week, Optus too revealed it was considering new services in the wake of the revised NBN FTTN policy (as discussed in our earlier blog http://bit.ly/1bnSqH9), signalling the potential for it to offer FTTP to customers on 24 month contracts. Like TPG’s plan, this would mean greater private sector involvement in the NBN than had been possible under Labor’s FTTP policy.
At this early stage, TPG and Optus’s foray into the fibre market raises a myriad of questions regarding the NBN and will add a new dimension of complexity for the Coalition in establishing its rollout technologies, priorities, and funding mechanisms.