Study backs NBN plan for Australian fibre network

ABC.net.au

The report says the Government should seek
to strike a deal with Telstra to further reduce costs.

The nine-month study into the Federal Government's national broadband network plan has found it can be built for under the $43 billion originally estimated and within eight years.

The $25 million study by consultants McKinsey and KPMG says the Government can go it alone and build the network for between $38 billion and $43 billion.

But it says the Government should seek to strike a deal with Telstra to further reduce costs.

Last April the Government announced plans to build a $43 billion fibre-to-the-home network, of which 51 per cent would be funded by the Commonwealth and the remainder through commercial investment.

The study says the Government's investment in the network will peak at around $26 billion by the seventh year after rollout, with $18.3 billion needed over the next four years.

Among its 84 recommendations it has also urged the Government to increase its rollout of the fibre-to-the-home network from 90 per cent to 93 per cent of Australian homes.

And it says the network should be wholesale only and stay Government owned until the rollout is complete.

It has not put a price on what the cost would be to the consumer, saying that will be dictated by the market, but it says the network will be competitive because people will want to pay for the high speed it offers.

But it says entry-level wholesale prices would be around $30 to $35 a month for a basic service.

Since the Government announced its plans last year questions had been raised as to whether it was commercially viable.

But Communications Minister Stephen Conroy says the report has showed the project is achievable.

The projects would deliver a connection of 100 megabits a second to homes, which is 100 times faster than current speeds.

An agreement with Telstra and NBN Co is yet to be struck which would see the network use some of its assets in return for a stake in the company.

The plan is yet to pass Parliament, with the Opposition vowing to block the plan and the Greens are yet to make a final decision.

But Prime Minister Kevin Rudd said earlier today he was determined to see the project go ahead.