NBN Co to assimilate TransACT's network in nine months

Summary:Following the competition regulator's nod of approval, NBN Co will begin incorporating TransACT's Canberra fibre network into its own over the next nine months.

NBN Co will begin integrating TransACT's 8,500-strong fibre to the premises network in Canberra over the next nine months after the Australian Competition and Consumer Commission (ACCC) announced it would not oppose the AU$9 million deal.

The agreement, first announced in May , saw NBN Co take over the existing 8,500 premises covered by the network and gain access to TransACT's duct network across Australia's capital, while TransACT completes construction to a further 4,500 premises by 2017.

The ACCC announced yesterday that it would not oppose the takeover, because NBN Co was unlikely to build another network in the area, if the deal was rejected.

"The ACCC therefore concluded that the proposed acquisition represents a bare transfer of assets and wholesale market share from TransACT to NBN Co. Accordingly, the proposed acquisition is unlikely to substantially lessen competition in any relevant wholesale or retail market," ACCC chair Rod Sims said.

The commission also said that by allowing NBN Co to take over the network, it would also remove TransACT's role as both a retail and wholesale network operator on the network, opening it up to more competition.

Although the agreement was reached under the former government, a spokesperson for NBN Co said that the acquisition of the network would meet the new government's policy of reducing the cost of constructing the NBN.

"The deal allows us to deliver the NBN to more Canberra homes more quickly and reduces the cost of constructing the network in line with government policy," the spokesperson said.

"Integrating these assets into the NBN will also broaden consumer choice in broadband services. The NBN is a wholesale open access network which means it is open to all retail providers on equal terms."

It will take approximately nine months to integrate TransACT's network into the NBN.

iiNet had long been looking to sell the fibre network after acquiring TransACT in 2011, iiNet CEO Michael Malone warned that if NBN Co decided to overbuild in any areas where the company has a fibre or a HFC network, iiNet would undercut NBN on the price.

"NBN can't force us to turn it off; they would have to buy it off us or compensate us to shut it down," he said at the time.

"Our cost base is about half of NBN's, if they really want us to stay there and compete for that; bring it on."

Topics: NBN, Australia, Telcos

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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