PAUL BUDDE. The departure of Bill Morrow – what’s next?

Apr 5, 2018

In the running up of the development of the NBN in the years between 2007 and 2009 some 400 people from the industry were involved in providing input into the design of this new infrastructure, they included senior engineers of all the major telcos as well as experts in e-health, education, smart grids and the digital economy. The outcome was widespread support for a nationwide fiber-to-the-home network which was furthermore supported by between 70-80% of both the voters and the business community. The project showed a vision of the telecoms and digital future for the country and also took the requirements into account of what our children and grandchildren would need.

When the current government took over in 2013 and dramatically changed the NBN, most of those involved in the original plan were disappointed and the project rapidly was classified as a 2nd rate solution.

When Bill Morrow accepted the position of CEO of the company he went into this situation with his eyes wide open. He followed the political line that the government prescribed rather than going for what would have been the best technical solution.

Most of the predictions made at that time of what the consequences of the downgrade would be, have eventuated over the last 5 years and the project is riddled with problems and is not delivering what the people expect of a modern digital infrastructure. It was sad to see that Bill at several occasions downplayed these expectations.

Predictions of the problems the network would face by using old copper infrastructure and old HFC infrastructure have all eventuated and is causing a lot of negativity in the market and Bill would have known this from the very start and obviously accepted such an outcome.

Within the constrains of the 2nd rate solution Bill has delivered the NBN as was requested by the government and obviously accepted by doing so the flak that also would be part of this job.

It could perhaps have been argued that from a telecommunications expert’s position he should have been more upfront about the problems that were inherently linked to the political task that he was given, but instead he followed the political party line on this.

There is still great uncertainty about the future of the NBN. If the current infrastructure as it will be completed in 2020 remains the end solution, its value will be only half of what it has cost so far as at least another $30 bn is needed to finish the job properly. Without any clarity on this situation it would be very difficult for any serious candidate to take on the job after Bill has left later this year.

With the upcoming Federal elections in 2019, this is perhaps the worse time for him the leave the company. With a new government there would be an opportunity for a fresh start for the NBN with a clear vision on what the national social and economic value of the infrastructure is for our country. Based on that a business and investment model could be developed as I mentioned in a recent submission.

There are basically two choices here:

  • Write of half of the value of the NBN and try to find a new investor/operator (privitasation)
  • Finish the job properly with FttH/FttC and even fibre to the 5G mobile tower (and find an extra $30 bn to finish the job before privitasing the NBN)

It would be important for the incoming CEO to know what the future direction of the NBN looks like. Another option would be to just fill the position temporarily until there is more clarity over its future, a third option would be to appoint somebody who makes an inventory of where we are now and make recommendations to the government regarding the future of the NBN. If the latter is the case – for the sake of the country – let’s hope that this will be bi-partisan decision otherwise we could possibly start all over again after the next elections.

This article was first published on the Paul Budde Consultancy Blog

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