Confidence in NBN sinks lower
Published 23-OCT-2017 15:49 P.M.
3 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Today’s headlines would seem to make it official: the National Broadband Network is a mess.
NBN Co-chief executive Bill Morrow has admitted he is unsure if the project will ever make a profit.
“We collect about $43 per month from retail service providers for each home they sell into,” Morrow said this morning. “In order to recover costs we need $52.”
Morrow’s admission came on the back of figures released earlier today that suggested connecting individual premises to the network in some regions was costing up to $91,000.
Morrow suggested that the NBN needed “protection” from 4G and 5G networks, which are delivering faster speeds to most consumers. Mobile data providers are aggressively expanding their assault on the ailing project, with TPG splurging $1.3 billion in April on its wireless mobile data network.
The news is of particular concern to the federal government, which requires the NBN to generate profits to return on its investment and fiscal backing.
“I think government moves are going to be inevitable,” Morrow suggested. “It all depends on how serious this competitive threat is, but being an old wireless guy I can guarantee you I would have had my team seriously looking at this.”
Morrow also dismissed calls to follow New Zealand’s Chorus earlier this month, claiming the comparison was poor.
“When they started building their FFTP network, Chorus already had a near nationwide Fibre-to-the-Node (FTTN) network in place that delivers wholesale speeds to retailers of between 30-1—Mbps,” he said.
Chorus has delivered fibre directly to 75 per cent of premises in New Zealand, which enjoys faster internet speeds than Australia.
The Australian Telecommunications Industry Ombudsman recently published its annual report for 2016-17, which revealed complaints involving the NBN had increased by almost 160 per cent.
“Complaints about services delivered over the national broadband network more than doubled, and while this is somewhat to be expected given the accelerated rollout, the increase is a cause for concern,” Ombudsman Judi Jones said on October 17.
“For the first time, complaints about internet services are now higher than complaints about mobile phones,” Jones added.
Over 27,000 complaints were filed in the past year, with 41 per cent in relation to network connection delays.
NBN debate continues in parliament
The sluggish returns of the NBN have reignited debate in parliament.
Prime Minister Malcolm Turnbull admitted that the project was a “mistake” and a “massive waste of money” during a press conference this morning.
He also questioned his decision to roll out the project under a new company, but wasted little time going on the offensive, suggesting the initial project was set up to fail.
“No one would’ve wanted to start from where Labor left us, so we have done the best we can getting that project on track,” he said. “The way Labor set it up was hugely expensive.”
Labor communications spokeswoman Michelle Rowland returned fire, claiming the Coalition had failed to deliver on their promises.
“This is absolute rubbish coming from a government which said they would deliver the NBN by 2016 for $29.5 billion. It’s now blown out to $50 billion and 2016 came and went,” she said.
“When Labor came to office in 2007 Australia was a broadband backwater. We needed to do something.”
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.