REPORT: The Turnbull government is in talks about privatising the NBN

The NBN rollout. Photo: file

Large chunks of the National Broadband Network could be sold off to private companies, according to a report in The Australian Financial Review.

Were it to proceed, the privatisation of the NBN could raise tens of billions of dollars to help plug the federal budget deficit and remove the operation of the network from the government-owned NBNCo.

The project has been dogged by controversy, cost increases, and scope changes since its inception. In his previous role as communications minister, Malcolm Turnbull oversaw a change to a multi-technology mix which involves using the pay-TV cable network for delivery of the service as well as fixed wireless, on top of the fibre rollout to both premises and “nodes” which then connect to homes using copper connections.

The continuing complexity of the project – which is hated on principle by many conservatives who believe internet service delivery should be the job of private industry – was underlined this month with the revelation that those copper connections used for the so-called “last mile” will need more than $600 million worth of upgrades.

The AFR reports that “talks are at an early stage and the government is not committed yet to a sale. If the sale goes ahead it will not take place until after the next election, expected in October 2016.”

As for what would be sold and for how much, it’s clear this is still in its early stages:

Various sale figures are floating around telecommunications circles and depend on how much of NBN is offloaded. Trade sources say there are “two separate conversations going on”, one where a much larger part of the NBN network would be sold.

However, the final sale figure is likely to be as low as $20 billion, those same trade sources say, which would effectively mean a massive loss for the government, although longer term ministers expect that such a sale would help the government’s fiscal position. In the event the government does not receive adequate bids, it might delay the sale or abandon it.

Still, there could well be a policy proposal that the Coalition takes to the next election. And the multi-technology mix of the new NBN conceivably makes it easier to sell off in “chunks”, whereas the initial concept under the Labor government was for a single fibre-based network rolled out across the whole country.

There are more details at the AFR >>

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