Telstra Corporation's (TLS) head of wholesale Stuart Lee has issued a stark warning that the attempts of rivals such as TPG Telecom (TPM) to "cherry-pick" the nation's most profitable internet users has the potential to undermine the national broadband network’s business model, The Australian Financial Review reports,
In September, TPG unveiled plans to construct a network with high-quality broadband, like the NBN, by running fibre to the basement of buildings. The network is hoped to connect 500,000 homes and businesses, and, if successful, will directly compete against the NBN for lucrative urban customers, likely with the advantage of being rolled out first.
According to the newspaper, Mr Lee said a key assumption in the NBN business model was that of a flat national price for all customers.
“If you’ve got a business model that assumes you’ve got flat rate national pricing, the question of overbuild does do something to undermine the business model,” he said, according to theAFR.