Competition vital to success of NBN: Optus CEO

Paul O'Sullivan warns NBN Co needs oversight board

The survival of the National Broadband Network (NBN) hinges on the sector maintaining debate and competition during the project, Optus chief executive, Paul O’Sullivan, has warned.

O'Sullivan told the audience at the KickStart IT media and industry conference on the Gold Coast over the weekend that debate among the IT community about the role of telcos had diminished in recent times.

“You have a key role to make sure you write about these issues and get the debate out there," O’Sullivan said.

One issue O’Sullivan said that needed to be discussed centred around competition in the telco market.

“In terms of making sure competition is protected, we need a higher level of transparency,” he said. “We’re on the edge of the biggest change in the sector since the industry had competition rescinded in 1992.”

O'Sullivan said there is a link between a lack of competition and a lack of innovation in the development of the NBN.

“Telstra takes 72 per cent of the profit pool and to thrive, we have to be the champions of competition,” he said. “People are mistaken to think that rolling out the NBN is going to guarantee the effective rollout of competition.”

As well as ensuring that competition must be continued, O’Sullivan said an oversight board must be created to keep the company accountable.

“Like any company, NBN Co needs a strong incentive to do the things it needs to do,” O’Sullivan said. “The operation of the NBN should be put out to competitive tender and the government should create an oversight board for NBN Co.”

A recent review of the NBN Co business plan by independent consultants Greenhill Caliburn formed a similar conclusion, recommending to the Federal Government that the NBN wholesaler be subject to numerous layers of oversight to ensure succes.

Creating the right model for the NBN was also important to O’Sullivan, who said it must not make the same mistakes that plagued Tesltra during last century.

“Whatever the model, it’s really important that we don’t repeat the mistakes of the past 15 years and create another monopoly... we can’t afford the NBN to be the Telstra of the 21st century,” he said.

“The big concern here is the dominant rise of winner takes all in terms of access and content.”

While he was critical of Telstra, O’Sullivan did say that NBN Co could learn from the competitive nature of the mobile market.

“The mobile sector is one of the most competitive in Australia,” he said. “If competition is properly structured, it will be a positive.”

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