In the Art of War, Sun Tzu wrote that all warfare is based on deception. It is a maxim that translates, uncomfortably, to modern government policy, and nowhere more so than in the long, expensive and increasingly strained administration of Australia’s National Broadband Network.
The NBN was conceived as a nation-building project under Kevin Rudd and Stephen Conroy. It was later reconfigured under Malcolm Turnbull into a hybrid model intended to reduce costs and accelerate delivery. The result combined the worst of both worlds: the price tag of vision with the performance of a workaround.
The NBN has been a financial catastrophe by almost any measure, and the numbers from its most recent annual report demand to be read slowly and with clear eyes.
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The network recorded a loss of $1.7 billion in the 2025 financial year. Over its 16 years of existence, the NBN has not once recorded a profit. Cumulative losses now stand at $36.2 billion. That is the record of a government-owned enterprise that Australians were promised would eventually pay for itself.
Commonwealth governments — Labor and Coalition alike — have injected $31.8 billion of taxpayer money, with a further $3.1 billion committed but not yet drawn down. The NBN has yet to demonstrate any credible path to earning a return commensurate with its cost.
This matters because the NBN was explicitly justified on commercial grounds. It is kept off-budget on the premise that it would generate a return over time.
Australians also pay heavily for what they receive. On a cost-per-megabit basis, NBN prices are high by international standards while performance sits mid-table. Countries such as Singapore, Chile, and France achieve materially higher speeds at comparable or lower cost.
The consequences extend beyond household budgets. Connectivity is a foundation of modern productivity, and Australia is paying a compounding price for getting it wrong.
Tens of billions in public capital committed to an asset delivering a mediocre product at high and rising cost is not simply a poor investment. It is a misallocation that imposes a dead weight cost on every business and household that depends on digital infrastructure to compete.
This would be less troubling if the competitive environment were stable. It is not. The NBN was built for a world that is rapidly ceasing to exist.
Fixed-line infrastructure now faces direct and intensifying competition from wireless alternatives. 5G home broadband requires no physical connection and continues to improve in speed and reliability.
Satellite services such as Starlink already deliver comparable speeds in many areas, with further competition from Amazon’s Project Kuiper emerging. Looming also on the horizon is mobile 6G, carrying theoretical peak speeds of 100 gigabits per second and near-zero latency. 6G will be faster than the NBN by orders of magnitude.
The NBN, in short, is a $36b taxpayer bet (so far) on copper and fibre in an era of wireless and satellite.
A government confident in the NBN’s future would respond with reform. This one has responded with something closer to a rearguard action, and its blueprint was drawn up nearly a decade ago.
In October 2017, then NBN chief executive Bill Morrow called for a levy on mobile broadband services, warning that 5G posed a serious commercial threat. Malcolm Turnbull, then prime minister, rejected the idea publicly and promptly. Morrow departed the following year. His vision, it appears, outlasted him.
In December 2025, the Australian Communications and Media Authority announced that Australia’s mobile telecommunications companies would be required to pay $7.3b in spectrum licence renewals by the end of the decade. ACMA had previously indicated the renewals would cost between $5b and $6.2b. The revised figure, an increase of about $2.3b, was arrived at not through open auction or transparent tender but through a price set by a regulator.
Spectrum is the radio airwaves on which mobile networks operate. Without it, there is no 5G and no path to 6G. Pricing it is not a neutral exercise. Higher renewal costs directly constrain investment in coverage, capacity and next-generation technology.
Telstra, which has invested $12.4b in its mobile network over the past seven years, has argued for a substantially lower renewal burden. Industry groups warn that higher spectrum costs will flow through to lower investment, higher prices, or both.
At the margin, a higher spectrum fee functions as a tax on mobile competition, applied at precisely the point where wireless technologies are emerging as credible substitutes for fixed broadband. Morrow asked for a tax on competitors and got one, ten years later, in different packaging but with an effectively identical outcome.
The government may argue that spectrum is a scarce public asset and that taxpayers deserve a fair return. That is true. But it does not justify pricing by administrative fiat.
Auctions exist for a reason: they reveal value, allocate efficiently, and avoid the perception, or reality, of policy being used to shape market outcomes. Setting prices too high does not maximise long-term public value. It suppresses investment and weakens competition.
This is the broader concern. The question is no longer simply whether the NBN earns an adequate return. It is whether policy settings are being used to protect its position as that position becomes harder to sustain.
If the NBN’s relative position continues to erode, the policy challenge will shift from funding its construction to managing its decline. And the cost will be borne by every business and household dependent on digital infrastructure to compete, to innovate, and to grow.
Sun Tzu also wrote that the supreme art of war is to subdue the enemy without fighting. The risk here is not that competitors will defeat the NBN outright. It is that policy will quietly tilt the contest in ways that reduce competition, slow innovation and ultimately raise costs for every Australian who simply wants a reliable connection at a fair price.
In an economy where productivity growth is already hard to find, that is not a trivial outcome.
Dimitri Burshtein is a senior director at Eminence Advisory.
Peter Swan is professor of finance at the UNSW-Sydney Business School
