NBN to generate “utility-style” returns: Conroy

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NBN to generate “utility-style” returns: Conroy

Commercial value of the asset.

Communications Minister Stephen Conroy has talked up expected commercial gains from the NBN, claiming they will generate a “utility style” return on investment.

“As a wholesale only network that forms a backbone for various services, the NBN could be considered utility infrastructure,” Conroy told the Realising our Broadband Future forum in Sydney.

"This means, we could anticipate the NBN to earn a utility-style rate of return, rather than the returns traditionally earned, or expected, by a vertically-integrated operator that completely dominates the market.

"While we remain confident of the commercial operating basis for the NBN, the benefits of the investment will be significantly broader."

The comments appeared geared towards an eventual commercial buyer of the NBN. The Government has previously made clear its intention to sell down its stake in the NBN assets after they are built.

Conroy also used his keynote to ridicule detractors that have questioned the need for an NBN or for 100 Mbps speeds.

“Can you imagine if governments in the early 19th century had taken a ‘do-nothing' approach towards investment in widespread electricity networks?” he said.

“It is to the eternal credit of leaders of the past that they had the foresight to make investments that would drive and enable future innovation, growth, efficiency, productivity and improved standards of living.”

He also derided suggestions that the Government “should know all the applications” possible at 100 Mbps before spending up to $43 billion on the NBN.

“Can you imagine if Apple had taken this approach to the iPhone?” Conroy asked.

“There are currently 85,000 downloads available from the App Store. These are apps that no one would have imagined when the iPhone was first developed.

“Should Apple have waited for all of these apps to be developed before building the iPhone or is it the case that without developing the platform, none of these apps would have been possible?”

Conroy also responded to suggestions that the Government should spend money on health, infrastructure management and education rather than pushing money into the NBN project.

He claimed the NBN “was one of those rare occasions where investments in one area results in flow-through to all those segments”.

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