The government of Australia announced in its latest state budget plans to reduce financing for the communications sector, including the country's National Broadband Network. The budget provides AUD 20.9 billion in equity funding to the NBN Co over the period 2014–15 to 2017–18. This amount is in addition to AUD 5.2 billion in equity provided from 2008 to 2013 and AUD 3.4 billion already planned for the current fiscal year. From 2018, the NBN will need to be self-financing or find additional investment from the private sector. This is three years earlier than the previous government's commitment.
The NBN's Strategic Review released in December 2013 found that the NBN would cost nearly twice what the current government has committed in funding and not be completed until 2024. The government said the previous administration under the Labor party "failed to meet its promises in relation to the NBN" and as a result the state will provide less funding and end its participation in the project sooner.
Going forward, the NBN will be expected to use a greater mix of technologies and rely more on existing infrastructure in order to lower the total cost and speed up delivery. This is expected to lead to a renegotiation of contracts with operators such as Telstra and Optus to use their infrastructure. According to the government, the new approach will save AUD 31.6 billion in funding costs, get the NBN finished four years sooner and enable nine out of ten Australians in the fixed-line footprint to get access to download speeds of 50 Mbps or more by 2019.
The government is also scaling back funding for National ICT Australia. NICTA, Australia's Information Communications Technology Research Centre of Excellence, was created to increase the scale and quality of Australian ICT research and development. The agency will receive a total of AUS 84.9 million within the next two years, after which it will need to be self-financing, the Department of Communications said.
A total AUD 100 million will be dedicated to improve mobile network coverage in so-called 'black spots'. This is aimed at improving coverage along major transport routes, in small communities and in locations prone to experiencing natural disasters, as well as addressing unique mobile coverage problems. Additional funding from industry, state and local government and communities should increase the total investment and provide around 250-300 new or upgraded mobile base stations across Australia.The government also aims to better coordinate mobile network roll-out with the NBN, for example, by seeking opportunities for towers in the NBN fixed wireless network to be used for colocation by mobile operators. A competitive selection process will start in the second half of this year to award the government funding, and the locations benefiting will be announced in the first half of 2015.
