The NBN is in the middle of yet another industry consultation on CVC pricing. Based on its press releases, the bundling of AVC and CVC pricing is a revenue neutral exercise. There has been an enthusiastic adoption of its bundled 50Mbps service. But, will its last beyond the NBN’s special promotion period?
For more, see Economuse 2018-01-29
The Money is broadcast every Thursday and over 30 minutes tries to understance a topic through interviews with experts.http://www.abc.net.au/radionational/programs/themoney/
On 2 November, its chosen topic was “Fibrte Optics – A look at Australia’s NBN” which set out to explain why “Despite the billions of dollars spent on the National Broadband Network, Australia has continued to slide down the international rankings when it comes to broadband speed and equity of service…Why has the NBN been such a debacle and what can be done to fix it on this week’s episode of The Money”.
The four experts interveiwed were:
Dr Tooran Alizadeh
Director of Urban Design at Sydney University’s School of Architecture, Design and Planning
Independent telecommunications analyst
John de Ridder
Independent telecommunications economist
Laureate Emeritus Professor, University of Melbourne.
The Department of Communications estimates the value of the NBN based on the depreciated current replacement cost less the present value of leave and superannuation. It should now turn to using net present value of discounted future cash flows; as it does now for Australia Post. In doing that, it should not assume that average revenue per users will rise at the rate needed to recover costs but assume levels that reflect the market (especially competition from wireless broadband). It is likely that the fair value revealed by this DCF estimation will then lead to a write down in equity.
Previous columns have been about the structure of NBN prices. This is about the current and future level of NBN prices. See Economuse 2017-10-10
This is the refereed paper that appears in the September 2017 issue of the Australian Journal of Telecommunications and the Digital Economy Safetynet AJTDE