Perhaps thinking he was helping to promote the financial strength of the NBN, Tony Boyd noted in the Australian Financial Review’s Chanticleer column today that the National Broadband Network delivered an EBITDA — earnings before interest, tax, depreciation and amortisation — of $1.77 billion. A large and impressive number, most would think.
In comparison, Telstra delivered a $6.11 billion EBITDA to support its $41.7 billion market capitalisation translating into an EBITDA multiple of approximately 6.66. Applying this same multiple to the NBN implies a valuation of $11.8 billion. Not very impressive given it has cost Australian taxpayers over $50 billion dollars to build.
Pre COVID, for the Commonwealth to write down — impair — its investment in the NBN by the tens of billions required would have resulted in a significant hit to the budget. But now, with the Commonwealth happy to spend with no constraint, keep an eye out for a massive write-down in the coming budget.
Also, keep an eye out for Kevin Rudd to claim that his plan could have delivered more for less. Or would that have been less for more?
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