Tuesday, 9 April 2013

NBN: Turnbull's Moment of Truth

Nobody in the media has interviewed the one person who can bring undone the Coalition's non-fibre NBN plan: Catherine Livingstone, Chair of the Telstra Board.

As Alan Kohler pointed out a very long time ago, any FTTN plan is completely at the discretion of Telstra and they have shown themselves to be tough negotiators and fiercely independent. Telstra has a contract for a fibre NBN, they can charge whatever they like for NBN Co or anyone to use their copper asset. Not only can they extract a premium over twenty years, they can price it out of the market.

Mr Turnbull responded at the time that this was "Pure Fantasy". David Thodey, CEO of Telstra, said at the time of signing the NBN Co Definitive Agreements, that Telstra was "spectacularly agnostic" about who wins the next election. I thought that odd wording.

Today we find out if Mr Turnbull repeated his Godwin Grech mistake or if he's sought in-principle agreement with the one group that can make or break his plan and possibly his career.

Previously I've commented that Telstra is no longer in the monopoly Telephone business: that model came apart in 2002 as Sol Trujillo properly understood and tried to rectify in 2005.

I don't believe that a non-fibre NBN is in the best commercial interests of Telstra, and maybe the market agrees: the share price fell around 1% yesterday. Was that on the basis of the Daily Telegraph article?

The one person who has a definitive view on this matter is the Chair of the Telstra Board. The media have forgotten to ask her opinion, I'm wondering if Mr Turnbull did as well.

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