Rudd’s center-left Labor Government has decided to boost the country’s Broadband services by 100 times faster through establishing a public-private partnership company, in which the government will hold majority stake. The formation of a new National Broadband Network Corporation with an initial investment of about $4bn is likely to generate 25,000 jobs every year during the project’s term, and the overall expenditure is estimated at $31bn.
The new network is expected to provide fibre to the premise (FTTP) technology to 90 percent of the population with a staggering speed of 100mbps and the remaining 10 percent who are in remote areas will be offered wireless connectivity with 12mbps. Australia is one of the few advanced countries that have slower internet services. After delivering the plan, the Prime Minister Kevin Rudd said “This is a huge enabler for the Australian economy for the 21st century”.
The broadband network public-private venture is the largest nation-building project in the history of Australia. It is the most ambitious and long term nation-building infrastructure project ever undertaken by an Australian government.
Earlier, the government had dumped its national broadband network policy of tendering the project to private companies after failing to derive reasonable value, and fearing delay in the project due to the current global financial situation. Nevertheless, the major players including Telstra and SingTel are learned to have pledged their support to the project.
The government plans to finance the state’s majority stake through Building Australia Fund and then through issuance of Aussie Infrastructure Bonds (AIBs) that will allow retailers and institutions to invest in the mega project. However, after five years of completion, the government will likely divest its majority stake.
Opposition Leader Malcolm Turnbull warned the public that the new project was likely to be three times costlier than the present internet services. An Australian subscriber on an average pays $30 to $40 per month for broadband services.