NBN $43 billion cost has lots of padding

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NBN $43 billion cost has lots of padding

Communications Minister Stephen Conroy has revealed the actual cost of the NBN is expected to be “significantly lower” than $43 billion, especially if industry players like Telstra trade their infrastructure for equity.

In a speech to the FTTH Council conference in Melbourne, Conroy said the cost range had "always" been between $38 billion and $43 billion, estimates that have "substantial contingency" built into them.

The estimates don't take into account the "substantial private sector interest in the network" that Conroy is expecting.

"This includes the possibility that companies will want to vend-in existing assets that can support the National Broadband Network for equity or some other financial arrangements," he told delegates.

"This will avoid the need for the duplication of some assets and subsequently also bring down the total cost figure even more."

Telstra, he said, will figure in these discussions.

"Already there have been strong statements from players within the telecommunications sector about the attractive nature of the opportunity and the potential to become involved," he said. "I'm looking forward to constructive conversations with players across the industry, including Telstra, about the National Broadband Network opportunity."

Conroy conceded that there a number of other questions which he is currently unable to respond to.

"Industry is rightly intrigued and is offering its view on major considerations such as future take-up rates, exactly how many homes and businesses will be passed or connected, and the design and specification of access services on the FTTP network," Conroy acknowledged.

The ability of existing assets optical fibre assets to support backhaul speeds of 10 or even 40 Gigabits per second, whether to use point-to-point or passive optical networking architecture, and the mix of aerial versus underground rollouts are also key outstanding questions, he said.

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