NBN Board’s Mass Resignation a Boon for Telstra

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Tuesday, September 24th, 2013
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Members of the board of NBN Co. have offered to resign en masse following heavy censure of the company responsible for Australia’s biggest infrastructure project by Minister for Communications Malcolm Turnbull.

The entire board, including chairwoman Siobhan McKenna, have already tendered their resignations, with a decision to be made on the matter by Turnbull at a meeting of cabinet scheduled for the start of next month.

Turnbull has long been a strident critic of NBN Co., censuring the board and senior executives in particular for huge cost blowouts, lengthy delays, and losses borne by contractors. The Communications Minister has recently focused much of his criticism at McKenna, dwelling on her lack of experience in the telecoms sector and the irrelevance of her qualifications as a management consultant.

The Coalition government’s plan for Australia’s nation-wide Internet infrastructure also differs markedly from that of the preceding government, and envisages a cheaper fibre-to-the-node solution as opposed to the comprehensive fibre-to-the-home network originally proposed by Labor.

Both the board’s mass resignation and the Coalition’s decision to pursue a fibre-to-the-node plan should prove to be of major benefit to Telstra, which is the owner of Australia’s copper communications network.

The decision to retain usage of much Telstra’s copper network means re-negotiations of the Telstra/NBN deal for copper access and compensation, as well as major amendments to network design.

Fairfax has also reported that in the wake of a mass resignation by the NBN board, former Telstra head Ziggy Switkowski is a highly likely candidate for the position of executive chairman, which will no doubt bolster the odds that the telecommunications giant will obtain lucrative contracts for the project’s construction.

Analysts report that Telstra could win construction contracts worth as much as $5 -6 billion should it obtain approval from the Federal Government to build the NBN across the country.

Telstra has already announced trials of technology for the Coalition’s version of the national broadband network as part of an aggressive bid to net construction contracts.

A Telstra spokeswoman has confirmed that trials using equipment provided by Alcatel-Lucent commenced at the start of the September, just days following the Coalition’s federal election win, and had thus far proved highly fruitful.

“Alcatel-Lucent has been our access network for many years and we regularly test technologies,” said the Telstra Spokeswoman to The Australian Financial Review. “We started the VDSL vectoring trial just after the election and it is going well.”

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