Telstra Chairman Throws Massive Shade At NBN

telstra nbn AGMImage: iStock

It looks like Telstra wasn't quite done with criticising NBN Co this year.

Speaking to shareholders at Telstra's AGM today, chairman John Mullen slammed the NBN, saying that Australian internet would be faster and cheaper if it didn't exist.

Even Telstra Hates The NBN

Shitting on the NBN is fast becoming one of Australia's favourite pastimes. This week Telstra joined the ranks of those complaining about the cost of a service that hasn't delivered on many of its promises - from speeds to roll out timelines.

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Mullen claimed that the private sector competition would have resulted in a 100 Mbps network that wouldn't have cost the general population.

"It is always easier to comment with the benefit of hindsight, but it is my view that over the last 10 years private sector competition between strong players such as Telstra, Optus, TPG and others was always going to build 100Mbps broadband access and speed to the majority of the population of Australia, in an ongoing competitive landscape and at no cost whatsoever to the taxpayer,” Mullen said.

He went on to say that the government could have then decided on subsidies in order to extend coverage to rural and regional Australia that would have come at a fraction of the cost.

"Instead, however, in the NBN we have created a state-owned monopoly that is going to cost the country more than $50 billion," Mullen said.

This intense criticism of the NBN from Telstra is unsurprising. According to the SMH, there has been a $1.7 billion ongoing impact to its earnings since 2016. That is set to raise to #3 billion a year by the time the rollout is complete.

The NBN, as well as mobile competition, resulted in the Telstra 2022 strategy, which has included drastic new plans, as well as cutting almost 8,000 jobs in 2018.

What it hasn't cut is CEO Andy Penn's pay packet. Telstra's recent remuneration report includes a 34 per cent pay rise for Penn, bringing his salary to $5 million.

While shareholders voted against large executive bonuses at the 2018 AGM, the remuneration report is likely to pass this time around. This will prevent a second strike and a possible board spill.

CEPU Communications Union National President, Shane Murphy urged shareholders to vote against the report in order to send a message.

"Andy Penn continues to bolster his own pay packet whilst overseeing one of the biggest axing of jobs in Australian corporate history," said Murphy in a press release.

"Let’s also not forget about Telstra’s declining share prices and slashed dividends to shareholders, and their reduction in technical and maintenance jobs – all of which is leaving Aussie investors and consumers high and dry."

"Telstra should be investing in jobs and reliable services – not investing in the CEO’s pay packet."

ACCC Slaps NBN Co With A Warning For Being Shady

The Australian Competition and Consumer Commission (ACCC) has issued NBN Co with a formal warning for discriminating between retail service providers (RSPs).

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Mullen also took aim at NBN Co's push into the enterprise market, which the ACCC gave the company a formal warning about just last week. NBN Co was found to be giving preferential treatment to some Retail Service Providers, which is in direct violation of the Competition and Consumer Act 2010.

According to the AFR, Mullen referred to NBN Co's enterprise market dealings as a violation of its wholesale-only mandate. He also said that its government funding gave the company an unfair advantage.

"It seems a waste of collective resources to be delaying investment in the consumer roll-out to people yet to be connected, and instead be focusing investment in the enterprise market where the NBN's duplicating existing high speed fibre for no service or speed advantage," he said.

"There is little doubt in my mind that were the NBN opened to competition, wholesale broadband prices in Australia would fall materially."

He also pointed out how NBN Co has been granted permission to lay fibre for businesses while the likes of Telstra are restricted from doing the same thing for residential services.

"It seems a waste of collective resources to be delaying investment in the consumer roll-out to people yet to be connected, and instead be focusing investment in the enterprise market where the NBN's duplicating existing high speed fibre for no service or speed advantage," he said.

Mullen went on to complain about the price of reselling NBN, which echoed sentiments from CEO Andy Penn in a recent Telstra Exchange blog post.

Mr Mullen went on to complain about the cost of reselling the NBN, saying the high wholesale price was unprofitable and causing companies to lose money. He said this meant most NBN retailers would be forced to leave the market.

"When Telstra was the regulated wholesale provider to the industry, Telstra charged an average of approximately $20 per user per month," Mullen said.

"The NBN Co is now charging some $44 per month on average and ... states its ambition is to get this to $49 in FY23."

"Clearly losing money is unsustainable for all the 180 odd RSPs out there and is why we have seen some companies already starting to withdraw from reselling the NBN."

He went on to say the effects of this pricing can already be seen in market, with some resellers turning to non-NBN broadband and 5G fixed wireless as solutions.

Apparently the ACCC agrees. The consumer watchdog launched an enquiry into the prices attached to baseline NBN plans just this week.

More to come...

[SMH, AFR]

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