New Zealand will be out on a limb if Australia's Liberal-led opposition coalition wins Saturday's federal election and axes the country's A$43 billion (NZ$54.4b) National Broadband Network, says IDC research analyst Rosalie Nelson.
The NBN roughly mirrors the New Zealand Government's $1.35 billion ultrafast broadband (UFB) initiative, but is even more ambitious, aiming to deliver fibre to 93 per cent of Australian homes, rather than the 75 per cent target being pursued in New Zealand.
The Australian Liberal Party last week confirmed it would scrap the initiative if it won the tightly fought election. Instead, it would commit a lesser sum – $6.3b in conjunction with the private sector – upgrading backhaul connections to deliver a 12.5 megabit per second broadband service to 97 per cent of Australian homes by 2016, using existing copper phone lines and wireless networks.
Shadow communications spokesman Tony Smith says the Liberals are not prepared to spend taxpayer money on the 100Mbps fibre service delivered by the NBN, and the parts of the network that had been built so far would be sold to the private sector. "We make no apology for not spending A$43b running fibre down every street."
He says the coalition would not enforce separation on Telstra. "Telstra was sold on a vertically integrated basis. It was sold to shareholders in good faith."
Ms Nelson says the abandonment of the NBN could lessen the trans-Tasman competition for technical resources, making the task of building New Zealand's ultrafast broadband network easier. "There is not a vast army of people waiting on the sidelines with the skills and ability to roll this out, and Australia's ability to pay a premium may have some impact on the timing of the build here in New Zealand."
But it would take New Zealand "further out on a limb", particularly in regard to the proposed structural separation of Telecom. Any perception that New Zealand would be catching up with the rest of the world by deploying fibre to three-quarters of homes and businesses would be incorrect, she says.
"There is a lot of misinformed rhetoric about the scale of what is happening in fibre-to-the-premises in other markets. New Zealand, Australia and Singapore are being regarded around the world as testbeds for national government-led initiatives."
The impact of the Australian election result on the public appetite for the UFB scheme here could cut two ways, she says. "If Australia did abandon the NBN, it allows room for rhetoric about New Zealand gaining a competitive edge with its infrastructure. Conversely, there may be some public sentiment that says `they are not investing in it, why are we going out and doing this?'."
The latest opinion polls suggest Labor has pulled slightly ahead of the coalition. The Australian Government has promised an A$11b compensation package for Telstra, which would be paid to migrate customers on to the NBN.
Analysts are divided on which proposal would be the best outcome for Telstra. Gartner's Geoff Johnson says: "It's a tough call. On the one hand, vertical integration has proven successful for the company historically, but on the other hand, Telstra gets A$3000 a customer to migrate them on to the Government's fibre network."
The Australian Information Industry Association criticised the lack of time to analyse the Opposition's plan. "I think we can safely say that the NBN approach of fibre to the premises is relatively future-proofed, whereas the solution offered by the Opposition is less so."
To be honest - targeting backhaul is probably the most cost effective strategy of broadband in NZ too as this is the current largest bottleneck. Also, with cabinetisation and better internal home wiring - line speeds could also be much better.