NBN won't make money: AAPT CEO

CEO Paul Broad says an NBN not needed when the vast majority of ADSL2+ customers use less than half of their available speeds

AAPT CEO executive Paul Broad has let rip on the National Broadband Network (NBN) telling the investment community that he can see no justification for the $43 billion infrastructure project.

Speaking at New Zealand Telecom’s Management Briefing Day, Broad claimed there was no way that the NBNCo and Federal Government could make a return on the network. He also criticised the NBNCo and Federal Government for not making use of AAPT’s existing fibre network.

“I cannot find any way they'll make any money and I find it absolutely unbelievable to think they're going to run fibre where I've got fibre today,” he said. “We've got 24 strands of fibre running Sydney, Melbourne, Brisbane. Do you know how many of those I use? Three," Broad said.

“I have fibre into every building in all the major CBDs, so does Optus, so does Telstra. NextGen have some as well. Pipe has some as well and they want to build some more.”

“We cover 96 per cent of [the] Sydney market and they want to build some more. You tell me how that makes sense. We've spent 20 years getting governments out of these businesses and now they're back again. So I have no sympathy for them. The last report said they'll come out to make it economic by making it all uncompetitive. You tell me how that makes sense?”

Broad said a major objection to the rollout of the NBN was that it effectively changed the rules of the game for telecommunication company investors.

“We strongly argue against [the NBN] based on a matter of principle but on a matter that the Telecom shareholders investing in a business would they expect to get value on because of certain rules of game when they invested,” he said.

“To change them and for the governments to invest, in my view, goes to the heart of whether we really endorse competitive structures in our market or we don't.”

AAPT would not be hurt by a completed NBN, Broad claimed, and the company’s investors would stand by it, even if AAPT decided to source wholesale connectivity from the NBNCo.

“Sure, I'll buy from them if the economics stacks up,” he said.

Broad also attempted to pour water on the Federal Government’s argument that high-speed broadband was both needed and wanted by Australian consumers.

“Of our [ADSL] two-plus customers today, 97 per cent use less than 50 per cent of the speed available to them,” he said.

“The businesses that use fibre in Australia, in most of the metro areas, have got fibre available to them today.”

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