NBN could force closure of a quarter of companies listed on stock exchange

A prominent professor from the University of Melbourne, Australia, has stated that the country’s National Broadband Network could actually kill off around a quarter of the companies listed on the stock exchange.

The Australian government and various industry groups have hailed the proposed National Broadband Network as a step in the right direction for the country. However, one prominent professor from the University of Melbourne has stated that the NBN could in fact kill off around a quarter of the companies that are listed on the stock exchange.

Professor Colin Ferguson from the Centre for Accounting & Industry Partnerships said that twenty five percent of companies on the exchange could be affected by changes in technology and the NBN. He said that those most likely to be affected were firms that were providing specialist services, as the NBN would result in more and more people turning to virtual solutions rather than taking on the services of these firms.

The professor said: “I think it’s going to put pressure on a number of business models. In my view, I could see as many as 25% of companies listed on the Australian Stock Exchange (ASX) disappearing in the next decade because of the proposed NBN roll out and other rapid technological change.”

He added: “There are a number of companies listed on the ASX whose business models are essentially threatened.  By and large they are models built around solving information asymmetry problems in markets for goods and services – filling an information gap between a ‘buyer’ and a ‘seller’ – but increasingly people will be able to do it themselves.”

Source – Newsroom.Melbourne.edu