Wireless a threat to NBN, government's own consultant warns

WIRELESS internet technologies present a major threat to Labor's $35.9 billion national broadband network, a government-appointed consultant has warned.

An assessment of the NBN Co's corporate plan by Greenhill Caliburn said the project's revenue assumptions "appear to be in line with a range of domestic and international benchmarks".

But the success of the network would rely heavily on the network's ability to achieve wide-scale usage.

The consultant said attractive pricing and strong competition between services providers should drive user uptake of the network.

"Key risks to NBN Co's uptake assumptions relate to competition from alternative technologies," the report said.

"Trends towards 'mobile centric' broadband networks could also have significant long-term implications for NBN Co's fibre offerings."

User uptake and retention, average revenue per user and management of building costs are identified as three key variables in the corporate plan.

The assessment, released by the government today, warned assumptions underpinning the NBN Co's corporate plan depended on the company's deal with Telstra being finalised.

The passage of government legislation allowing the rollout of overhead cables, mandating fibre at greenfields sites and delivering regulatory protection to NBN Co from competition in commercially attractive areas - as set out in the corporate plan - would also determine the success of the project.

Communications Minister Stephen Conroy said Greenhill Caliburn's report confirmed NBN Co's key assumptions underlying revenue and cost projections.

"As with any infrastructure project, there are always risks, contingencies and external factors and the government will work closely with NBN Co to put in place agreed performance indicators to track its performance and adjust strategies or operations as needed," he said.

The consultancy stressed it had not conducted an in-depth analysis of the company's future funding requirement.

In a rebuff to predictions that NBN Co would struggle to obtain funding, the report said NBN Co was likely to obtain debt funding at planned levels.

Labor has consistently refused to conduct a thorough cost-benefit analysis on the NBN project.

Story by James Massola www.theaustralian.com.au