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commentary What a difference a month can make. On 5 December, business-focused telco People Telecom inked a deal with Telstra's wholesale division for the provision of fixed-line voice and broadband ADSL services.
Written by Renai LeMay, Contributor
commentary What a difference a month can make.
Renai LeMay, ZDNet Australia
On 5 December, business-focused telco People Telecom inked a deal with Telstra's wholesale division for the provision of fixed-line voice and broadband ADSL services.

At the time, People Telecom's chief executive Ryan O'Hare said Telstra was his company's wholesale "supplier of choice" moving ahead.

"The relationship we've got with Telstra is excellent," he told your writer.

Fast forward to 19 January, 2006.

"Telstra Wholesale does not provide ADSL2, and has no intention to do so. It's part of [Telstra CEO] Sol Trujillo's strategy of keeping it for his retail customers," O'Hare told your writer, as he signed a landmark deal to gain access to NEC Australia's extensive ADSL network.

"ADSL1 will be gone, we've got to move those customers somewhere," he added.

One can only wonder what Telstra said to O'Hare in that month ... it can't have been good to engender such a quick turnaround.

And People Telecom isn't the only telco concerned Telstra won't be able to provide for its needs into the future.

Enterprise-focused telco Commander yesterday announced similar access agreements with two ADSL network owners, including Powertel.

Like People Telecom however, Commander also said it had signed a contract to resell some of Telstra's products ... in Commander's case, fixed-wire, mobile and data services.

What the moves by both telcos represent is a need to deal with Telstra on one level, while pragmatically planning for the worst on another.

Unlike some of their competitors, Commander and People Telecom have not put their money into capital-intensive last-mile ADSL rollouts.

Consequently, both must obtain access to networks owned by other companies in order to provide services.

But with Telstra unlikely to provide wholesale customers with access to its ADSL2+ network, putting all their eggs in the Telstra basket doesn't look like a good option for the two.

Powertel's managing director Paul Broad claimed telcos who hadn't invested in their own infrastructure were "vulnerable" in the current climate.

"I know there's been lots of debate about that in the industry," Broad told your writer this morning.

"Powertel obviously took a position some time ago to get ourselves some good infrastructure and get the operational leverage," he added.

"We think there's a real market there for wholesale services which we're happy to provide. We're also providing some services to AAPT and BT (British Telecom)."

There is some truth to Broad's statement: generally, building your own ADSL network provides greater control instead of using someone else's.

However, with ADSL broadband gradually becoming commoditised, any capital investment is by nature a gamble. The fact that Commander and People Telecom are still around and thriving argues against their "vulnerability".

Certainly Commander's acquisitive spree would seem to suggest it actually has a rather predatory nature.

What do you think? Are ISPs without their own last-mile access infrastructure "vulnerable" in the current market or is their position rock solid? Send your thoughts to renai.lemay@zdnet.com.au.

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