A 50 percent writedown of the value of the National Broadband Network now appears inevitable, after the Australian Competition and Consumer Commission joined the chorus calling for such a move, according to independent telecoms analyst Paul Budde.

Budde first claimed a 50pc write-off would be necessary in 2016 when the newly elected PM Malcolm Turnbull failed to introduce what Budde claims were “essential structural changes”.

“The fact that the ACCC has now joined the chorus is a significant development. It is important to mention that the ACCC is not a political organisation and that it genuinely operate in the best interest of the country,” Budde has written a blog published this week.

The Government is flatly rejecting any such calls, he notes, adding: “If they don’t take the lead, it is important that the rest of the country (industry and users) start looking at what would be the best strategy in the wake of the inevitable write-down and restructuring that will result in a major change to the Australian telecoms market.”

Budde says it is important that the NBN company finishes the rollout and leaves the infrastructure in the best possible condition.

“Eventually we would like to see most premises connected to gigabit networks,” he writes, adding; “Not that we all will use all of those gigabits, but it would be an advantage to have the capacity and all of the other technical advantages of such a network, essential for any modern society.

“We already see that cities such as Adelaide, Newcastle and Brisbane are developing their own gigabit networks. In whatever way we look at the overall broadband network, 90pc of all of the telecoms infrastructure will be fibre-based and in this part of the network there is very little opportunity for competition.

Budde concludes: “It certainly would be worthwhile for both political parties to sit down together and discuss this like grown-ups – taking into account the national interest and not party politics.”

Budde yesterday told CDN: “The [proposed] writedown is based on what is economically viable/needed: a high-speed network facilitating  our modern society and economy. You can’t have this together with an ROI of six or seven percent.

“If we take that as a starting point, this means we need to be able to deliver in 2020 100Mb/s at a price not higher than $100. Working your way back from that, you come to the conclusion that roughly half the value of the (current) $50 billion value needs to be written down.

“This then creates an economic/financially viable platform for whoever needs to build the NBN out to a proper FttH/FttC network.”

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