Govt should start scoping NBN sell-off in 'near term'

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Govt should start scoping NBN sell-off in 'near term'

Infrastructure Australia weighs in on privatisation strategy.

Infrastructure Australia has recommended that the government commission a scoping study "in the near term" to determine when to sell the national broadband network.

According to the Australian Infrastructure Plan [pdf] released today, the scoping study should consider the objectives of privatising NBN and how to structurally prepare the company for sale.

It recommends the examination of several structural options for NBN, including splitting the company along access technology or geographical lines.

"To prepare for a future sale, it will be important that NBN Co does not ‘enmesh’ different technologies in a way that cannot be separated later," Infrastructure Australia said.

"Accordingly, NBN Co could establish separate internal business units in anticipation of creating a more competitive network." 

While the report recommends factoring privatisation into NBN thinking now, it notes it "may" be prudent to hold off on any attempts to sell off the network until after the rollout is complete.

“The next challenge for the Australian government will be to ensure the efficient rollout of an open-access, wholesale-only fixed-line and fixed wireless broadband network; with capabilities that will cater for ever-increasing demand,” the report said.

“It may be desirable to defer the privatisation of the NBN until the rollout is complete, both to avoid disrupting a complicated infrastructure project and in recognition that private investors are likely to have less appetite for risk during the rollout phase.”

Rural and regional telecoms

The report also looked at growing Australia’s smaller cities in order to take some of the pressure off Melbourne, Sydney and Brisbane.

While the rollout of the NBN in remote, rural and regional areas would help with this aim, many areas lacked competition in the mobile market, Infrastructure Australia said.

“In areas of low population density, there is often insufficient mobile revenue to support two sets of competing infrastructure. In many areas there is a single mobile network provider – typically Telstra,” the report stated.

Infrastructure Australia urged that the NBN's fixed wireless towers should be shared with mobile carriers, and that USO funding should be redirected from fixed line to mobile services.

The recommendation echoes similar calls made by Vodafone chief executive Iñaki Berroeta late last year.

“The high cost of providing fixed-line or payphone services to many regional communities are a legacy requirement of past decades. These high costs may be offset by providing more affordable, reliable mobile network access,” the report said.

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