March 24 (Bloomberg) -- Australia’s A$37.9 billion ($39 billion) NBN, a government-backed fiber Internet network, may be more than 20 percent cheaper to construct under an opposition party proposal, the head of the company building it said.
Asked if the proposal from the opposition Liberal-National party coalition, which has an election winning lead in opinion polls, may be 10 percent to 20 percent cheaper, or even more than that, NBN Co. Chief Executive Officer Mike Quigley told Australian Broadcasting Corp.
Prime Minister Julia Gillard’s Labor government is laying fiber to homes and businesses for 93 percent of Australia’s population, replacing the slower existing copper network owned by Telstra Corp. The plan from the opposition would see the network stop short of people’s houses, instead connecting to the node, or street cabinets.
“The upfront capital costs would be lower for fiber to the node network than a fiber to the premise,” Quigley said today. Still, the opposition proposal will be more expensive to maintain over the long-term because it uses more sophisticated technology, he said.
A Galaxy poll published in the Herald Sun newspaper today showed showed 55 percent of voters in favor of the opposition on a two-party preferred basis ahead of elections scheduled for Sept. 14 compared with 45 percent for Labor. The measure is designed to gauge which party is likely to win enough seats to form a government under Australia’s preferential voting system. The poll of 1,005 people was conducted March 22 to March 23.
Opposition leader Tony Abbott has vowed to cut spending on the NBN project. Abbott is preferred prime minister with 37 percent of voters compared to 33 percent for Gillard, according to the Galaxy poll.
Melbourne-based Telstra, Austalia’s biggest phone company, is getting A$11 billion of compensation from the government after agreeing to give up control of its copper network to make way for the new system.
The Telstra agreement may need to be revised if NBN changes its business model to only connect to the node, Quiqley said.
“The deal with Telstra is to build fiber-to-the-premise network so we negotiated access to Telstra’s ducts and pits and exchanges,” Quiqley said. “What we didn’t negotiate is rights to use their copper, in fact that wasn’t part of the remit.”
The NBN plans to connect all Australians, with those not reached by fiber to be served by wireless and satellite.
Parliament has entered seven-week hiatus, leaving the government to prepare its May 14 budget.
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