Australia - The NBN will cost less than AUD 43 Bn and 7% return

[it wire] The Federal Government can build its fibre-to-the-premises National Broadband Network for less than the original $43 billion capital estimate and get a 7 per cent return on its investment without Telstra's help, the KPMG-McKinsey implementation study has found.

And the KPMG-McKinsey study, which was released jointly by Communications Minister Stephen Conroy and Finance Minister Lindsay Tanner in Canberra today, presents a business case that says consumers will be offered better, faster services at lower cost than broadband offerings of today.

The implementation study recommends a fibre roll-out to 93 per cent of the population – rather than the 90 per cent previously promised – with the other 70 per cent serviced by fixed wireless and satellite technologies.

It also says NBN Co should be able to provide minimum speeds of 20 Mbps to those connected by wireless and satellite, rather than the 12Mbps previously promised by the Government.

The study says the NBN roll-out should cover the additional 1.3 million premises expected to be built nationwide by 2017-18, effectively adding the cost of greenfield sites to the NBN build.

It says the Government's peak investment requirement would be $26 billion by the end of year seven, by which time the NBN Company will be generating sufficient revenue to borrow from private capital markets the remainder of its needs.

The KPMG-McKinsey study expects the Australian Government will recover its investment with a return on investment of about 7 per cent by year 15 – or about seven years after the construction phase of the NBN has been completed.

The study says the total cost of the build would be reduced with a deal with Telstra, but says the return on investment of seven per cen is achievable without Telstra's cooperation.

NBN to deliver return without Telstra: McKinsey
see also NBN Implementation Study