Telstra optimistic ACCC will not block 3G deal

Telstra executives are optimistic Australia's competition watchdog will soon informally clear its 3G network alliance with Hutchison 3G Australia, as the partners signed binding agreements to proceed with the deal.

Telstra executives are optimistic Australia's competition watchdog will soon informally clear its 3G network alliance with Hutchison 3G Australia, as the partners signed binding agreements to proceed with the deal.

Telstra officials said while discussions with the Australian Competition and Consumer Commission (ACCC) were continuing, they were optimistic the regulator would green-light a deal the telecommunications heavyweight claims will give it a two-year head start over a rival 3G alliance between Optus and Vodafone.

The factors likely to be in favour of the decision are the partnership's plan to wholesale services on the joint network to third-party players and the fact the Optus-Vodafone rival service is on the horizon.

It is understood the carrier regards some of the media coverage of the competition watchdog's concerns as "overstated".

The comments came as the rivals signed binding agreements with each other to proceed with key aspects of the deal, formalising an arrangement first announced in early August.

In a statement today, Telstra and Hutchison said the partnership would allow the telecommunications heavyweight to join the operator of Australia's only up and running 3G network from 1 July next year.

A small administrative group, 3GIS, is to own and operate Hutchison's existing W-CDMA radio access network and fund future network deployment under a plan agreed by the partners.

"3GIS will manage the Telstra-Hutchison infrastructure expansion first into Canberra and then into regional areas, giving it an established lead on of more than two years on the SingTel-Vodafone 3G rollout plan," the partners said, referring to Optus' Singaporean parent.

Telstra would initially gain access to Hutchison's existing 2,000-base station 3G footprint, encompassing Sydney, Melbourne, Brisbane, the Gold Coast, Adelaide and Perth.

Under the deal, Telstra will pay Hutchison AU$450 million -- in instalments starting from December -- for 50 percent ownership of Hutchison's 3G assets.

Hutchison chief executive officer Kevin Russell said in a statement "the competitive advantage we have established by having achieved a stable and sound technical platform will be evident for some time after our competitors launch".

The partners have appointed Bob Dulhunty, a 30-year veteran of the telecommunications industry, to the post of chief executive officer of 3GIS. The six-person board will include three representatives from Hutchison and three from Telstra.

The partners also said they had agreed an infrastructure deployment plan for the next two years. The first deployment, into Canberra, is scheduled for completion by the end of 2005.

"Telstra and Hutchison will each continue to own separate core networks, application and service platforms and will conduct their retail 3G services independently and in competition with each other," the parties said.

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