But Optus vice-president of public and regulatory affairs Andrew Sheridan hit back at the comments, saying Telstra would receive $3 billion in payments from the NBN Co in the 2020 financial year.
“When Telstra was the monopoly wholesale provider, it spent the better part of a decade fighting the regulator through the courts to defend its high access prices,” Mr Sheridan said. “It is a bit rich for Telstra to be lecturing NBN on wholesale price levels.”
“There is scope for NBN to adjust the current price structure to improve the overall service value for users but ultimately the NBN must make a return on the substantial taxpayer investment.”
Telstra was the first-to-market with a high-speed 5G mobile network and rival Optus is building out its 5G own infrastructure.
Optus has a recently launched 5G fixed broadband service but telco sources said this was not a strategy to rival the NBN, but to complement the network in areas with slower speeds.
Mr Penn said that 5G was not going to replace the NBN, but “it does present the opportunity for many customers to be switched to mobile”.
“This would be incredibly damaging for the NBN and would have the effect of putting further upward pressure on wholesale prices thus compounding the problem,” he said.
Telstra has positioned itself to capitalise on uncertainty surrounding the network’s future by setting up an infrastructure unit that could eventually be sold or merged with the NBN.
At a separate event in Melbourne on Wednesday, former Australian Competition and Consumer Commission chair Graeme Samuel said uncertainty and negativity in the market would mean a sale of the NBN would be inappropriate in the short term.
The NBN is slated to be sold some time after 2021, with legislation requiring it be “built and fully operational” prior to its sale. The organisation has faced significant criticism from users, telcos and government over its stilted roll-out and “unsustainable” pricing model.
“You have issues about the roll-out, issues about the success of the roll-out, the wholesale costing and the particular challenge of 5G,” Mr Samuel said.
“There are all those issues which I think create too much uncertainty for short term privatisation.”
The NBN would need to be running “business as usual” before a sale could be considered, the former ACCC chair said, warning the market would not react positively to speculation.
Current ACCC chair Rod Sims said in July any acquisition involving Telstra or its subsidiaries would be “inappropriate” and Communications Minister Paul Fletcher has also doubled down on the government’s position against a telco buying the taxpayer-funded network.
“Do not confuse the issue and try to integrate Telstra’s InfraCo into the process. It’s an unnecessary complication and would be an inappropriate aggregation of potentially competitive infrastructure,” Mr Samuel said.
He also did not support vertical integration, nor a sale focused on maximising price, instead pushing for the government to place long-term public interest policy above short-term commercial expediency. “It’s a big ask, but I think it’s fundamental,” he said.
The NBN Co is currently consulting about its pricing and telcos have made submissions asking for a range of changes to help boost their profits. Mr Fletcher recently said the government would not intervene on NBN pricing.
NBN needs to recover its costs and generate a return to remain ‘off-budget’, meaning a price cut could trigger a write-down of the asset by the government.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.