NBN deal transfers network ownership: Telstra

NBN deal transfers network ownership: Telstra

Summary: Telstra CEO David Thodey has said that the AU$11 billion NBN deal is about moving the ownership of the fixed network to the government, regardless of whether it is fibre or copper.

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TOPICS: NBN, Telstra, Australia
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Telstra CEO David Thodey has indicated that any renegotiation with the Coalition government over access to the copper network would see the government once again take full ownership of the copper network.

As Communications Minister Malcolm Turnbull prepares to release a statement of expectations for NBN Co and appoint former Telstra CEO Ziggy Switkowski as executive chairman of the government-owned company at 2pm AEST today, Thodey spent this morning answering questions from retail shareholders in Sydney.

Once the new NBN Co board is appointed, Turnbull will need to enter negotiations with Telstra over access to its copper network if the Coalition's proposal to alter the NBN from a majority fibre-to-the-premises network to a fibre-to-the-node network is to succeed.

Thodey said that the NBN board is "the government's decision", and changing the technology in the NBN design is also a decision for government, but said that Telstra will still retain the value of the AU$11 billion deal it signed with the former government to lease ducts and pits and transfer customers onto the NBN.

"If they want to change things and do different technology, that's their decision. AU$11.2 billion is what we agreed to, and that's where we will stay," he said. "We're getting on with life, we have a different life to live."

He said that the renegotiation would centre around transferring the ownership of the fixed network from Telstra back to the government.

"We have agreed to move the ownership of the fixed network, whether it be fibre or copper, to the government, and that would be their responsibility," he said.

"They want us to do it, [and we're] happy to do it on a commercial basis."

In response to a question from a shareholder concerned that Telstra would be stuck with the maintenance costs for the copper network, Thodey did not comment on the quality of the copper network, but said that the maintenance would be part of the negotiations.

"We've got to work through with the government about how they want to use it, and so that's something that is a further discussion," he said.

"In any arrangement, we will cover off the ownership of the copper, the maintenance of the copper going forward."

Thodey has previously said that Telstra's copper network could last 100 more years.

It comes as this week, Telstra revealed that is is currently testing vectored VDSL similar to that which would be used in Turnbull's NBN plan in a pilot with vendor Alcatel-Lucent.

Topics: NBN, Telstra, Australia

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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  • Taxpayer copper upkeep

    Rising copper maintenance costs already burden Telstra to the tune of over a billion annually, and Telstra only guarantees voice quality, not fast broadband.

    This is why Telstra was prepared to accept just $11 billion to get that cost of its bottom line. 99.25% of shareholders accepted this figure on the basis that retail revenues will sharply increase when 93% of premises are able to purchase high-revenue services over fibre.

    So what will Telstra shareholders need to receive if copper FTTN is used for 71% of premises?

    David Thodey has here confirmed they will not return to maintaining infrastructure, just retailing. The government must pay the copper upkeep with our taxes.

    Shareholders will also expect an up-front sum equivalent to at least a decade of the marginal retail revenue they will forego when only 22% have fibre bandwidth and 71% are on copper.

    We can expect Telstra to seek foregone revenue compensation between $15 billion and $40 billion on top of the $11 billion handover of the physical copper. Assuming no contractor delays, Turnbull's FTTN can then be built for between $44 and $70 billion, plus maintenance and electricity bills. What a bargain.
    umbria
  • What's the problem

    Whats the problem with Australia taxpayers dishing out $11 billion for a corroded hundred year old copper cable network. Got to be better value than buying up Indonesia's old fishing boat fleet, and probably in about the same condition.
    JCggggtyyt
    • What's the problem ? ABBOTT GOVT.

      The $11B is only for access to pits and ducts, not the old copper that's costing telstra $1B a year in up keep . Ziggy will have knowledge with Nuclear power for the power needed to run the 70,000 cabinets outside every street cnr . Ziggy was in charge of Telstra when the share price went south , Kodak when they had the patents for the digital cameras and didn't build them ? Jobs for the boys ?????????????
      breadvanner