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NBN hook-up to take nearly a decade

A basic feed from the National Broadband Network will cost telecommunications wholesalers $24 a month, the federal government has revealed, and will take nine years to connect more than 10 million homes.


Communications Minister Stephen Conroy released the long-awaited NBN business plan in Canberra on Monday.

The basic plan will offer download speeds of 12 megabits per second and upload speeds of one megabit per second.

“NBN Co’s expected internal rate of return is 7.0 per cent,” documents provided to reporters by the company show.

70 per cent uptake expected

The assumption is based on a 70 per cent takeup of the network by businesses and homes.

Further to the expected rate of return is the prediction of a $13.4 billion capital raising from the markets by 2015.

The NBN will deliver fibre to the home for 93 per cent of the nation with the remaining seven per cent of premises to be covered by either wireless or satellite.

Specific targets for the rollout of the yet-to-be-built network were also included in the business plan which was released alongside the corporate watchdog’s advice to government.

All of these predictions and plans remain dependent on what NBN chief Mike Quigley described as the “consummation” of the deal between NBN Co and Telstra.

Mr Quigley told reporters discussions with the nation’s largest telecommunications provider would continue throughout the Christmas break.

“I spoke with (Telstra boss) David Thodey this morning,” Mr Quigley said.

The initial $24 price for a basic NBN service will drop overtime, the plan promises.

Mr Quigley described as “conservative” the assumptions on future growth made in the business plan.

“The growth in demand for speeds will be considerably lower than the extrapolation of increasing speeds implied by the history of internet access technologies,” the plan said.

Prime Minister Julia Gillard, Communications Minister Stephen Conroy, Treasurer Wayne Swan and Finance Minister Penny Wong were addressing reporters on the business plan.

The plan had been under wraps since early November, despite repeated calls to release it.

The government last month made a 36-page summary available to appease its critics.

The full 400-page document has now been released.

Gillard defends viability

Prime Minister Julia Gillard says the business plan proves that the network will be both viable and affordable, as it will be delivered at a smaller cost than originally thought.

It will also be profitable, meaning taxpayers’ investment in the NBN “will be returned with interest”, while uniform wholesale prices will also be achieved, she said.

“Those prices will be affordable for consumers,” she told reporters in Canberra.

Ms Gillard said the plan proved the NBN would deliver major benefits for Australia, lauding it as the “telecommunications development of our century”.

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