NBN a waste of money

* Rick Wallace, Tokyo correspondent
* From: The Australian
* October 30, 2010 12:00AM

ONE of Japan's richest men has labelled Australia's $43 billion National Broadband Network a stupid waste of taxpayers' money.

Masayoshi Son, who heads Japanese internet and mobile giant Softbank and counts Apple's Steve Jobs and Microsoft's Bill Gates among his friends, attacked the Gillard government's signature project yesterday.

Quizzed about the NBN by The Weekend Australian after delivering a speech in Tokyo, Mr Son said it was completely unnecessary to spend so much taxpayers' money.

"It's a waste; it's a stupid solution," he said. "Without using taxpayers' money you can get 21st-century infrastructure."

Mr Son had just finished delivering his own vision of how to deliver fibre-to-the-home connections throughout Japan without any taxpayer contribution.

He claimed that his solution, recently put to Prime Minister Naoto Kan and several members of his cabinet, would deliver basic fibre connections for just 1150 yen ($15) a month, far cheaper than what is envisaged under the NBN.

That is also far cheaper than the current typical monthly price of Y5000 ($63) for cable in Japan.

Mr Son's proposal involves splitting the part-government-owned NTT into telco services and fibre network businesses and rolling out cable to all homes within five years.

Softbank and fellow carrier KDDI would fold their fibre cable infrastructure into the merged network business, which would then be 40 per cent owned by the government and 60 per cent by NTT, Softbank and KDDI.

Mr Son said that a one-time rollout of fibre -- similar to the NBN proposal -- would cost just one-third as much as cabling individual homes on an on-demand basis.

"My advice is forget about the demand basis installation, just do it with a plan. Replace whole cities: this month Hiroshima City, next month another city, and so on," he said.

"Replace entire cities with a plan and remove metal and replace with fibre. That way the installation cost is one-third and the installation speed is much quicker."

He believes that no new capital investment would be required from taxpayers and that the network business would soon become profitable because of lower maintenance costs stemming from the replacement of the decaying copper network.

"After five years it (the network business) would generate very profitable free cash flow. If that company generates profitable free cash flow over the next 20 years, then it can get all the money from banks, not depending on taxpayers' money.

In a speech at the Foreign Correspondents' Club of Japan, he acknowledged Softbank would benefit from the plan, but said so would the country and potentially the world.

Mr Son said that while Australia faced obvious technical challenges in terms of distances and sparse population, Japan's mountainous terrain and thousands of islands posed challenges, too.