Don't compare Telstra, Optus deals: NBN Co

Summary:The NBN Co's deals with Telstra and Optus to decommission their networks and move customers onto the NBN cannot simply be compared to one another, according to chief executive Mike Quigley.

The NBN Co's deals with Telstra and Optus to decommission their networks and move customers onto the NBN cannot simply be compared to one another, according to chief executive Mike Quigley.

Last month, Telstra announced it had signed a definitive agreement with the NBN Co and government for $11 billion, $5 billion of which will be paid to Telstra over the next 10 years as customers are disconnected from its copper and hybrid fibre-coaxial (HFC) networks and transferred onto the NBN. On the very same day, rival telco Optus announced that it had entered into an agreement with NBN Co for $800 million to move around 500,000 HFC customers onto the NBN.

At the third hearing of the joint committee for the NBN in Canberra last night, former Optus executive and Liberal MP Paul Fletcher asked Quigley a number of times to explain whether the Optus deal was worth more to Optus on a per-customer basis than the Telstra deal was for Telstra. Fletcher had calculated that at 500,000 HFC customers it would be worth roughly $1600 per customer to Optus.

Quigley, however, wouldn't be drawn on a per customer value, saying that there were different elements to each deal. For example, Telstra's deal involves both HFC and copper customers, while Optus' deal is only for HFC customers.

"You can't take one element of the deals and compare them," he told Fletcher.

At the hearing, Quigley also revealed that following the announcement of the definitive agreement with Telstra, NBN Co had begun a 12-week intensive analysis of Telstra's pits, ducts and exchange space. From that point, Quigley said, NBN Co will be able to release a 12-month deployment plan for the NBN, as well as a three-year indicative plan for where the NBN will be rolled out to in that period.

In response to previous coalition questions as to why NBN Co had not negotiated to get access to Telstra's copper network as part of the deal, Quigley said that such a clause would have added more costs to the deal.

"[It] was an extremely complex deal with Telstra. To have negotiated in parallel for another deal to use the copper would have been an added layer of complexity that would have added many, many months to reach a conclusion — if it could have reached a conclusion at all," he said.

Shadow Communications Minister Malcolm Turnbull has indicated that should the Coalition take government, it would examine the NBN and likely shift away from fibre-to-the-home to a fibre-to-the-node network in many areas, utilising Telstra's existing copper network.

Quigley also reported on the progress of greenfields fibre, saying that NBN Co had undertaken work at a number of greenfields developments in Sydney (including Blacktown, Rhodes and Bonnyrigg) since taking on the role of fibre provider of last resort for the majority of greenfields developments. He said work at a further 33 developments is expected to start over the next four months.

The Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 legislating the greenfields work passed the lower house of federal parliament yesterday, with committee members having to temporarily suspend the hearing in order to attend a division on the Bill. All 12 amendments proposed by the Coalition were defeated and the Senate will now consider the legislation before it is finally passed.

Topics: Government, Broadband, Government : AU, NBN, Optus, Telcos, Telstra

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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