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Labor says NBN will take nine years to construct

Monday, 20 December 2010 | By Michelle Hammond

The National Broadband Network will take more than nine years to construct and will have $5.8 billion revenue by 2021, the long-awaited business plan into the network has revealed.

 

Prime Minister Julia Gillard says the revenue forecast will deliver economic benefits to the effect of 1.3% of gross domestic product. The plan also estimates a take-up rate of 70%.

 

According to Gillard, the NBN will be accessible to more than 1.7 million premises by June 2013, with usage of those expected to be at 600,000 premises. More than 13 million premises will be able to access the network by 2021.

 

At the peak of construction, nearly 6,000 premises will be connected to the network every day. The entire project will record positive operational earnings by 2018, with a positive net income by 2021.

 

The Government will also put up $27.5 billion in equity, while it will borrow $13.4 billion between 2015 and 2021, with the total equity and debt funding to come to $40.9 billion.

 

The business plan also outlines some examples of costs consumers can expect to pay, with one 50GB plan on a 12MB connection to cost between $53 and $58 per month.

 

The government has also accepted the advice of the Australian Competition and Consumer Commission, with more points of interconnect to be distributed than the original 14 proposed, and wholesale uniform pricing will also be used.

 

The ACCC said in a statement the government has accepted its advice, with the NBN Co. identifying a list of 120 initial points of interconnect as meeting the ACCC’s criteria. The list of POI locations will be subject to a public confirmation process.

 

The Australian Information Industry Association has welcomed the NBN business plan, with chief executive Ian Birks describing it as “an essential step” towards the development of business confidence in the digital economy and the development of new business models.

 

“It will allow the business community to gain a clearer understanding of emerging opportunities and form the basis for much stronger engagement between the business and technology sectors,” he says.

 

Birks says businesses should act now to future-proof revenue and ensure competitiveness as Australia’s digital economy takes shape.

 

“The benefits of a digital economy will not simply arrive with the broadband connections – we need to create the right environment,” he says.