Shares in national broadband network (NBN) residential internet reseller TPG Telecom Ltd (ASX: TPM) are up around 4 per cent this week after the powerful Australian Competition and Consumer Commission issued a report stating that the government should subsidise the problematic NBN Company further.
The report suggested that the status quo of the NBN Company seeking to turn a profit on behalf of its government investor was not realistic given the cost pressures faced by internet service providers, consumers, and the NBN Co. itself. As such it suggested the government should consider a cash injection into the NBN Co., debt relief, or an asset write down to take responsibility for the mess it has created.
Since the NBN Co. has imposed unworkably high service charges on internet providers like TPG, Telstra Corporation Ltd (ASX: TLS) and Vocus Communications Limited (ASX: VOC) their shares have collapsed nearly in half or more. Consumers have also been left complaining about NBN speeds as further public subsidisation of the project becomes more likely.
