Turnbull slams NBN Co satellite deal

Condemns "spare capacity" as wasteful

Malcolm Turnbull has condemned as "wasteful" NBN Co's $620 million contract with Space Systems/Loral (SS/L) for the construction of two satellites to deliver broadband to remote areas of Australia.

The two Ka-band satellites covered by the contract are intended to deliver broadband to the 3 per cent of households that fall outside the NBN's fibre footprint and LTE fixed wireless network. The satellites will deliver initial peak wholesale download speeds of 12 megabits per second and uploads of 1Mbps.

"At the expected cost of $1 billion to build, launch and operate two satellites built from scratch, NBN Co is spending over $10,000 for each of the 106,000 households its Corporate Plan says will be using satellite broadband in 2021," Turnbull said in a statement. "That does not even account for the other costs required for the satellite portion of the NBN, such as installing receivers at remote premises."

Turnbull said that the when the new satellites are launched, they will have "huge" spare capacity. "Once again, the NBN is investing more than is needed to achieve its mission. Once again, the incentive will be for this giant new Government monopoly to intrude into other markets, and undermine existing private sector providers."

"Why buy when you can lease?" Turnbull said during a doorstop interview yesterday. "Why buy and build vastly more capacity than you need when there is surplus capacity elsewhere? And why don’t you have a transparent process that enables us to assess the cost-effectiveness of the different options?"

According to NBN Co the first satellite will launch in early 2015, with the other launched in the second half of the year.

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