Tuesday, 6 August 2013

NBN: The Turnbull Node Plan a Financial Disaster, can only lose BILLIONS.

In a longer piece, I conclude that over 20 years, the Coalitions' FTTN plan for 8.968M lines (85% active) will lose $18.2 billion, without paying Telstra for the use of its Copper.

It can never break-even, it can never achieve an ROI, it can never pay back the billions the taxpayer will be forced to invest in it.

Not only is the Coalition NBN Plan designed to be thrown away,
 it's designed to lose Billions in taxpayers dollars
 and they don't intend to pay Telstra anything doing this.

This is in-line with the Coalition's stated objective, because they conveniently don't include Depreciation, Tax and repaying the capital:
The NBN is projected to be cash flow positive in 2020‐21.
The assumptions I've used: (Attempts to obtain model parameters used by Coalition have been rebuffed).

  • $900 per built port  [from Coalition Background doc, pg14]
  • $90/year maintenance [from Coalition Background doc, pg14]
  • 8.968M built lines and 1 line = 1 port
  • 85% ports active
  • 6%/year interest on Capital
  • Depreciation over 20 years, straight-line ($900 ÷ $20 = $45)
  • CVC charges start at 30GB/mth, for $3/mth and grow at 3.5%/year to $6/mth over 20 years. [not fully modelled]
  • Maximum FTTN AVC charge is $16/mth, same as current ULLS charge.
  • Single AVC charge for FTTN, no tiered pricing.

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