Telstra warns on TPG NBN plans

Telco says a separate TPG network would undermine NBN business model.

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.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles