The NBN pressure cooker

NBN Co boss Mike Quigley and his team have been subject to intense pressure from the federal opposition but are the attacks unwarranted?

NBN Co boss Mike Quigley and his cohorts have been subject to intense pressure from the federal opposition and some of the criticism, especially the personal attacks on Quigley, have been unwarranted.

However, the reality is that the organisation is under enormous stress from a number of different directions, and it is obvious that operating under those circumstances is not ideal.

Judging the performance of NBN Co since its inception in 2009 isn’t easy and  a company that starts up from nothing and is ramping itself up to connect 6,000 premises per day somewhere during mid-2013 will most certainly have growing pains. With 2,500 people now working for the company, and some 25,000 people contracted to it, smooth organisation is an enormous task. And anybody able to do this deserves respect, and even admiration.

It’s hard for a young company to develop its individual culture and in some ways this is a good thing if you’re looking for entrepreneurship and innovation. However, this also makes it difficult to create coherence and a team spirit. The company has attracted a range of senior external directors and managers, all of whom have their own ideas and egos; and in the absence of a strong team spirit this creates its own power struggles.

At the same time the company is under enormous political pressure, and currently this takes precedence over everything else. The single focus is on ramping up the rollout to the promised 6,000 premises a day. Everything that stands in the way of that goal will have to give.

The Gillard government’s future depends to a large extent on NBN Co’s success in reaching that goal. And the political pressure that the opposition applies to this project further aggravates that situation. On top of that there are many other issues that, under normal circumstances, would be dealt with, but which currently come second, and that creates problems in these areas.

Any company director will agree that such a situation is far from ideal for the proper running of an organisation, but for NBN Co this is the company’s reality, whether they like it or not.

As I have said before, part of the overall problem is that the NBN Co’s business model is flawed. The model should have been constructed on the basis of the company being an infrastructure builder and not a telco.

The NBN is a national investment and should not be judged on its capacity to generate telco revenues. It’s an issue that will need to be addressed after the next election, no matter who wins.

The real return on investment (ROI) of the NBN has far more to do with social and economic benefits, and that significant productivity gains in other sectors that can only be achieved if this national broadband infrastructure is operated on a trans-sectoral basis. The real economic value of the NBN comes from other sectors using the infrastructure and many of these benefits will not show up on NBN Co’s balance sheet.

This is an issue that will need to be addressed after the next election, no matter who wins.

This is an edited version of a post originally published on December 5. Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries. 

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