Rather, Australia's telco giant recognises that profits will fall off a cliff in the medium term as a result of the National Broadband Network. The compensation NBN payments will steady Telstra's profits for the next four or so years. This gives Penn a window in which to invest the $3 billion sufficiently well to shore up future earnings growth. Telstra said that despite compensation payments from the government, the existence of the NBN will ultimately cost it around $2 to $3 billion in annual earnings - or around 25 per cent of its profit.