NBN Co Business Case

NBN Co Corporate Plan: Financial headlines

The total capital expenditure for the project is estimated to be $35.9 billion. The Government expects to contribute $27.5 billion in equity for the rollout.

Based on advice from Goldman Sachs, NBN Co plans to arrange debt funding progressively from 2015. This would be done without a Government guarantee. Total debt funding is expected to peak at $13.4 billion, during the rollout.

By June 2013, NBN Co aims to pass or cover around 1.7 million premises with its fibre, wireless or satellite networks. At the end of the rollout, it is estimated that there will be about 13 million premises covered with 8.5 million connections.

NBN Co’s expected rate of return has been assessed at 7.04 per cent, based on a range of assumptions.  This exceeds the average 10 year bond rate of 5.39 per cent (July 09-Nov 10).

As the sole equity contributor, the Government will have oversight of the project and the flexibility to ensure outcomes are optimised for all Australians.

Key performance indicators include:

• Internal rate of return:                 7.04 per cent
• Total capital expenditure:            $35.9 billion
• Government contribution (equity): $27.5 billion

The NBN Co Corporate Plan presents updated information and financial figures compared to the Business Case Summary released on the 24 November 2010. The Corporate Plan reflects final Government decisions regarding a range of issues including Points of Interconnect and the role of NBN Co in new real estate developments.

Business Case Summary

The NBN Business Case is based on detailed engineering, financial and business analysis undertaken by NBN Co. over the last twelve months.

The Business Case includes robust sensitivity analysis throughout the plan, which shows that the key conclusions (outlined below) as measured against the stated objectives of the project are robust to a range of assumptions.

NBN Co Business Case Summary