Telstra warns of rising internet costs from NBN losses

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By Leith van Onselen

Telstra has advised that its profit fell by 27% to $1.2 billion in the first half of 2018-19. CEO Andy Penn said revenue is being affected by the impact of the national broadband network (NBN) on its fixed-line business. He argues that the NBN’s wholesale prices will eventually need to be reduced by around $20 as they are very high compared with when Telstra itself was a wholesale provider. Accordingly, Penn argues that telcos will need to increase the cost of their internet plans unless the wholesale price is reduced. From The ABC:

NBN Co’s mandate is to deliver a commercial return to its shareholder, the Federal Government, and to do so Mr Penn said it is charging telcos far too much for access.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.