news MNF Group, the Australian provider of hosted voice and data communications services and parent company of MyNetFone, has said it is “disappointed” that Tuesday’s Federal Budget did not write off some of the costs of building the NBN network.
In a statement, the Group said “inaction by the Turnbull Government on this front threatens the feasibility of the NBN business model”.
“The NBN business case is under serious threat,” said MNF Group CEO and co-founder Rene Sugo. “Failure for the scheme to reach a critical mass of activations could ultimately affect the viability of the whole telco industry and leave consumers worse off.”
The NBN wholesale pricing model is currently based on usage and relies on reaching what MNF called an “unrealistic” target of 80 percent of all Australian households having an active NBN service by 2020.
Without reaching that figure the NBN will not generate enough revenue to repay the cost of building the network, the statement said.
Shortfalls in activation numbers, and consequently in revenue, will have to be clawed back via an increase in retail prices.
This could make it a poor proposition for “providers to sell or for consumers to buy”, it added.
“In order to reach its targets, NBN has to be the ‘number one choice’ for data services for consumers and be available at a viable price point for service providers of all sizes to resell. As it stands, this is not going to be realistic,” Sugo warned.
“A fair model would allow middle players to step up and effectively compete in the market, driving NBN uptake and balancing out the challenge of the NBN bypass services. Australia needs a healthy, competitive telecommunications industry for this ambitious NBN build to succeed,” he concluded.