The NBN’s impact on Telstra, iiNet and TPG

Founder and Chief Investment Officer of Montgomery Investment Management
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ADSL has for many years been the staple of what retail service providers (RSPs) utilise to offer internet services. This is largely based off of the existing Telstra copper network, one originally designed for telephony services and not the internet. Technology has since developed and more advanced ways of delivering internet capacity are now available, particularly in fibre-based networks, the backbone of the National Broadband Network (NBN).

An NBN had been debated by various private institutions such as Telstra since the early 2000’s yet were never able to obtain approval by the ACCC. In April 2009, the Labor government announced plans for a new NBN project that would provide a wholesale open-access network to RSPs and deliver internet connectivity at 100Mbps to 90% of Australian households via fibre to the premise technology (FTTP). This project was estimated to cost $43 billion and would be designed, built and operated by a newly created government business enterprise: NBN Co.

Part of the process would involve the decommissioning of telephone network assets owned by Telstra and Optus, allowing for NBN Co to hold a monopoly in the provision of wholesale internet capacity.

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