Telstra CEO: Hands off my backhaul

Facing a possible ban on bidding for 4G wireless spectrum, Telstra chief David Thodey today warned the government to steer clear of its backhaul networks — its last front for infrastructure competition.

Facing a possible ban on bidding for 4G wireless spectrum, Telstra chief David Thodey today warned the government to steer clear of its backhaul networks — its last front for network-level competition.

David Thodey talking to Telstra CFO John Stanhope
(Credit: Liam Tung/ZDNet.com.au)

With the government's threat to bar Telstra from participating in next-generation wireless spectrum auctions, expected after 2012, Telstra chief David Thodey played up the company's right not to sell its backhaul networks.

Answering a question from Deutsche Bank analyst, Sameer Chopra, Thodey declared Telstra's backhaul network as "core" to its business.

"Are we willing to consider them having access commercially, wholesale? Of course we are, but there are certain assets that are core to this business, and we do not have any intention or desire to vend these assets in," said Thodey.

Telstra's Next G mobile network in conjunction with its extensive backhaul network is set to be the last front the telco can fight competitors at an infrastructure level. Telstra chief financial officer John Stanhope today said that once Telstra has been separated, differentiation would need to occur above the network layer, which would include billing systems, products and services.

Thodey went on to explain that when it came to mobile services, there were two considerations: spectrum and backhaul. While the government had control over spectrum allocation, Telstra controls its own backhaul network.

"I want to stress," said Thodey, "that our mobile network is second-to-none because we have fibre running to all the base stations." He clarified that 85 per cent of its mobile base stations were Ethernet connected. "So the backhaul is second to none. And remember that's where many mobile operators have fallen foul as the data volumes have increased," he added.

The Federal Government is currently assessing bids for its $250 million tender to build key backhaul links in rural areas where Telstra has enjoyed a monopoly.

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