The Departments of Finance and Communications revealed today that there will be a major revenue hole in the Government’s alternative NBN plan.

“The Government has focused exclusively on the cost of constructing the NBN, and has ignored the issue of revenues NBN Co can earn,” Shadow Minister for Communications Jason Clare said today.

“We now have specific evidence that a fibre-to-the-node approach will generate lower revenues than fibre-to-the-premises, putting its financial viability at risk.”

Under detailed questioning at the Senate Select Committee, Departmental officers acknowledged that revenue assumptions for the NBN would need to be revised down with a change in approach from FTTP under Labor to FTTN under the Coalition’s Fraudband.

Each of the following issues will result in NBN Co revenues being driven down:

• NBN Co facing infrastructure-based competition in HFC areas;
• The rollout in HFC areas being delayed until 2016 or beyond;
• NBN Co facing higher wireless-only assumptions in FTTN areas;
• NBN Co not being able to provide premium business or enterprise products (the highest value offerings) in FTTN areas;
• NBN Co not being able to provide 100, 250, 500 or 1,000 Mbps products to residential customers in FTTN areas;
• Residents or businesses in FTTN areas having a limited ability to migrate to much higher speeds without further CapEx investment from NBN Co;
• NBN Co facing lower data traffic across its network; and
• NBN Co not being able to provide its current multicast product in FTTN areas.

“The strategic review needs to be clear about how much lower the revenues will be under an alternative model compared to Labor’s fibre-to-the-premises plan,” Mr Clare said.

“Malcolm Turnbull has made a lot of claims about his approach but it is strange that he, of all people, hasn’t mentioned the issue of revenue,” Ms Rowland said.

“Today is just more evidence that this is not the government the Coalition said they would be.”