Telstra will build the NBN sooner: Turnbull

Telstra will build the NBN sooner: Turnbull

Summary: Communications Minister Malcolm Turnbull has told ZDNet that the deal signed today with Telstra for a fibre-to-the-node trial will see the NBN built sooner.

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Signing up the incumbent telecommunications giant Telstra to build fibre-to-the-node for NBN Co out to 206,000 premises will ensure the project is completed sooner, according to Communications Minister Malcolm Turnbull.

telstra-will-build-the-nbn-sooner-turnbull
(Image: Josh Taylor/ZDNet)

This morning Turnbull announced that NBN Co and Telstra had entered an agreement for Telstra to build and construct a fibre to the node network out to 1,000 nodes and 206,000 premises across locations of regional Queensland and New South Wales.

In an interview with ZDNet this afternoon, Turnbull said that Telstra will retain ownership of the copper as part of this agreement, which will ultimately feed into the renegotiated definitive agreements between NBN Co and Telstra.

"The copper will remain the property of Telstra pending the conclusion of the renegotiations. What this is, is really getting on with the job and making sure that we're not waiting to kick-start the fibre to the node part until the ink is dry on the amendments to the definitive agreements with Telstra," Turnbull said.

Turnbull said that the value of the deal was commercial in confidence, however reports have placed the deal between AU$100 million and AU$150 million. The minister said that it was "in the envelope" of the estimated cost of deploying fibre to the node outlined in NBN Co's strategic review completed last year.

"It's within the assumptions in the strategic review for what it would cost to do fibre to the node," he said.

This includes maintenance costs for the existing copper lines that NBN Co will need between the node and each premises, Turnbull confirmed.

The decision to proceed with the fibre-to-the-node rollout comes as the government has yet to release the independent panel's cost-benefit analysis that Turnbull had originally said would determine whether the government would proceed with a fibre-to-the-node deployment. He said that the report would still play a role, but the locations picked were suitable for the technology choice.

"The cost-benefit analysis will feed into the deployment strategy, but these are all areas where if you were going to do any fibre to the node, you would do it," he said.

"We're very alert to the factors that determine whether you go fibre to the node or fibre to the premises, and I recognise there will be precincts where you can argues one way or the other.

"These are areas that are very suitable for fibre to the node, and where you can achieve a very good outcome in terms of line speed and service quality very quickly by doing it."

Turnbull said the aim was to have the first 206,000 premises connected to the NBN in 12 months, with the NBN-Telstra agreement finalised before then.

"It's very much on track and the lawyers are steaming away writing long documents even as we speak," he said.

"The idea is that we'll get the amendments to the definitive agreements signed later in the year, hopefully. We're very confident about that and then the larger scale fibre-to-the-node rollout will proceed. This is like the first wave of the fibre-to-the-node deployment.

"It's designed to get the engine working so that you've got 1,000 plus nodes being deployed, and then that will just continue to ramp up over the next few years."

He said that there would be no trial of getting wholesale access to the HFC networks owned by Telstra and Optus prior to the renegotiation.

"I think operating it as a wholesale platform is not unique or special. There are plenty of examples of that," he said.

"The HFC is a very proven broadband technology. The bottom line is the DOCSIS is one of the largest, if not the largest platforms for broadband. And like the DSL technologies, it keeps on getting better."

Optus and Vodafone have recently warned of Telstra's growing market power in the telecommunications industry, fueled by its work with the government. Turnbull said signing the incumbent telco up to build the node network was not something out of the ordinary.

"Working with the incumbent telco to build the network isn't revolutionary. It's happening in just about every other market," he said.

"We just want to get the thing built. That's the bottom line — with Telstra you're going to get it built a lot sooner."

Topics: NBN, Government, Government AU, Telcos, 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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Talkback

25 comments
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  • I will bet

    I will bet this is an upgrade of RIMS not actual rollout of nodes so basically people with some of the best internet in the country will get even better and those with the worst are put at the bottom of the queue.
    ajbau
  • ...

    I just ... I can't ...
    colonel.mattyman
  • Is it backwards day?

    Turnbull says about HFC networks, "I think operating it as a wholesale platform is not unique or special. There are plenty of examples of that,".

    I didn't think there were open wholesale HFC networks anywhere, they are certainly less prevalent than FTTN rollouts.

    So why are they trialling FTTN yet not HFC? It seems to be completely backward.
    cameronwatt
  • Hopefully

    The customers are all LNP voters, what they get is all they will ever get.
    The good news for those areas is however with their cost of electricity, they will soon have a plentiful supply of CHEEP Batteries for their solar systems and wind generators.

    Good old Telstra with the same feet on the ground in different vests and charging their rip off prices and screwing the taxpayer again and again and again, it better include a 10 year 100% guarantee for product and workmanship
    Abel Adamski
  • HMMM

    1,000 Nodes, 206,000 customers. 200:1 split compared with GPON FTTP @
    Abel Adamski
  • Excellent

    Now that Telstra Wholesale has re-defined the minimum speed of their blistering fast ADSL2+ to 768kbps but still markets it at 20Mbps, what will they redefine their build of the NBN to ?

    I am guessing 1.5Mbps
    epaslv
  • Kill the NBN Now!

    This project is a colossal waste of money, right from the start. Another Rudd/Labor disaster in the making. No cost benefit analysis, behind schedule, over budget and low take up rates and will probably be obsolete by the time it's finished. Waste of taxpayers money. We don't need this.
    peterp772000
    • Lets looks at Turnbull Track record

      In 3 months from a a "Fully costed plan everyone to get 25mbps by 2016 for $29b" to a $41b 3 years behind 25mbps by 2019
      JasonKent
      • Fixed that for you...

        'up to' 25mbps, no longer guaranteed (as about 100 people tried to point out to LeMay for 9 months before he finally accepted it).
        TrevorX
    • You are nearly right

      Yes, what Turnbull is doing is a collosal waste of money. No amount of cherry picking reports, having mates write reviews containing fabrications to back up his plan, in anyway change reality. Reality is that, baring the 1 to 100 chance Trunbull seems to be betting on, what is being rolled out will need replacing withing a few years of completion.
      Neither plan has a CBA. Both are behind schedule. It was on budget to Turnbull got on board, now over with all the extra spending he has done to show how right he is. The take up rates are actually excellent 4-5 times the take up rates of the UK.
      Yes, what Turnbull is doing is wasting taxpayers money, whether it's through an increase in wholesale charges or through not paying it back, he's wasting billions to play petty politics and massage his ego.
      Pilfer-52cec
    • Not quite Mr No Facts

      The original NBN under Labor would have cost the tax payer nothing - in fact, if it had been completed as planned its revenue would have made the government profit which could have been used to extend the network gradually over time to outlying regions (perhaps eventually eliminating wireless and satellite altogether) or at the very least it could be offset against the tax base, which reduces the amount of tax required from tax payers - precisely the opposite of your assertion.

      The revised LNP NBN is not comparable - it will cost more by definition, because the nodes are expensive, there will be a couple of billion more in annual maintenance and at least another half billion in annual electricity costs. Then you have a network that is only a minor upgrade on ADSL performance unless you're within 200m of your local node (beyond 400m VDSL2 is actually slower than ADSL) so take will be lower, which reduces profitability. If you have less income AND higher costs you end up with lower ROI, in this case to the point where it will make the whole thing unprofitable and a drain on the economy - the LNP network is most definitely a 'cost to tax payers'.

      As for the 'low take up rates' that is simply nonsense - take up rates were higher than anticipated and planned for in the original business plan, and importantly the distribution of higher tier customers (with higher ARPU) was significantly greater (which, if it had been a general trend, would have meant the NBN would have paid down the debt and been profitable much sooner than anticipated). If your statement relates to the number of connections compared to initial expenditure, that is also an erroneous argument, as most of the initial build cost was in the Transit (back haul) network, which will be built no matter which plan is followed. It's like complaining about spending 99% of the cost of a new rail network when not a single train has travelled down it - of course not, trains can't run until the track is complete. The same with the NBN - you can't connect customers until the network has been built. The network costs money to build. It is idiotic to complain about connection numbers vs costs during initial stages.
      TrevorX
  • We have gone full circle

    Interestingly, I think i remember that that Malcolm Turnbull had suggested that the private sector should build the NBN in the first place and now we have basically got that by giving the build to Telstra. Further, it seems to me that this is simply a major distraction - a very controversial project with lots of opportunities for money to be misappropriated (lost, stolen etc) and lots of mates deals going on...

    Frankly I just want the business outcome - faster reliable internet. The Government works for us - the tax payers and I believe that the large percentage of tax payers (the stakeholders) have clearly stated in many public and private forums that they want FTTP not FTTN. If a business was to pull the stunts the that the Australian Government has pulled and wasted the funds as has happened in this project to-date - the management and project management teams would be fired and the company would be out of business.

    The NBN is simply just one of the major money pits the Government has and we - the tax payers have the power to fire them. Enough complaining by all parties - if we are not happy with the company - "Australia Inc." - then fire them!
    Darren Blackley
  • Would Turnbull please explain?

    I'm confused. I understood that the NBN originally had two main objectives:
    1. To break Telstra's infrastructure monopoly, by buying the useful parts of it and installing a modern system over which they'll have no control..
    2. To speed up the inevitable switch from wires to fibre.

    I must be a bit thick, but it seems that there's something rotten in the State of Australia, when Turnbull turns back the clock and befuddles us all with smoke and mirrors. Australia seems to be run by the same old lobbyists and Boys' Clubs.

    A few more years of Labour's incompetence would be a small price to pay, if it would accomplish those two main objectives. I suspect that Shorten would fly in, if he promised us the original NBN.
    paleoflatus
  • independent panel's cost-benefit analysis

    Ah yes, the 'independent' panel. This speech details exactly how 'independent' it really is.
    (You'll be surprised.)

    https://www.youtube.com/watch?v=ZbJfTn3W4XU
    Tailgator
  • Faster and Cheaper

    Our Finance Minister, Mathias Cormann has been promising that it will be faster and cheaper.

    How much faster than 100Mbps will it be?
    epaslv
    • I believe he says it will be...

      "vaster and jeeper", and rumour has it several CBA financial advisors told him so...
      btone-c5d11
  • Hell no just another way to wast money. Here's an idea.

    I live in a regional 1 zone distance from the CBD yet Telstra force it as Regional 2.
    Big deal you might think.

    There's a plan by a provider that uses TELSTRA as it's bulk provider and a Regional 1 plan with unlimited ADSL+ including home phone unlimited calls to Australian phone numbers and mobiles not 13 or premium number services.
    For Regional 1 zone plan is $79.95 per month, Regional 2 $119.95 per month same plan.

    Data is data any plan should be available at any exchange that can support ADSL or ADSL+ the fact that when the Government sold off Telecom to become Telstra they should have separated the exchanges and infrastructure to be paid for by telco, internet, companies for staff and ongoing costs so the tax payer is not hit for a pseudo private taxpayer assisted government Telco.

    Now the plan is to let this anti competition monster take over the NBN.

    Kill the NBN take away Telstra's dictatorship control of the exchanges that were paid for by taxpayer money in the first place.

    Pass a law stating that if a plan is offered to an exchange that can handle it the offending control organisation be fined $800,000 per offence and that money be used to upgrade exchanges or infrastructure for all Australians.

    Or the ability to charge a Telco for the difference of a better plan they are deliberately denying per month and compensation if calls and data will not be matched by the provider.
    If not allow that plan to be available.

    Australia has laws about competition yet in so many areas fails to uphold them and when they get caught out they amend the law so as to appear they are not breaking them.

    A Fair go for Australians this idea is dying.

    No offence meant to fairies for the following:
    It the cost of wrongly zoned areas due to Telstra pay invisible fairies to maintain zones that lay within the Regional 1 zone distance limit from the CBD thus the added expense?
    Take the red pill and WAKE UP!
    • Howard & Costello.

      Howard and his mate Costello just wanted to sell Telstra and make a quick buck.
      The same as they did with Sydney Airport, just a quick buck and now Costello mate Hockey is whinging about lack of competition at Sydney airport.
      There are laws in place to separate Telstra into 2 separate companies, these are being controlled by the ACCC. However it now appears Turnbull has changed statute law by just handing the keys to Telstra ignoring the separation laws passed by the previous government.
      Well you can thank the idiots in the national party for letting down the people in the bush as they have done nothing for the bush people in 40 years. Look at Barnaby Joyce, he represents a NSW seat, yet he lives in Queensland, what a joke.
      Mudrat70
  • NBN - A Political Football

    What a mess this is becoming - For Turnbull to imply progress is being made because "...the lawyers are steaming away" shows he is not grounded in any reality. With Abbot gone at the next election, it will start again.

    What a mess
    uandme314
  • How is it legal to withhold costs of public expenditure?

    How is it in any way reasonable, transparent or legal for the government to withhold expenditure details of a public infrastructure projects as 'commercial in confidence'? In what universe is this in any way acceptable? If they can get away with not disclosing the cost of this phase, what's to stop them doing the same thing with other stages, or large swathes of the whole project? Can you imagine what the response from Turnbull would have been had NBN Co attempted to withhold cost details of the early stage trials (such as in Tasmania)?

    Turnbull thumbs his nose at the Australian public because history demonstrates that he can without repercussions, and it appears he is right - where was ZDNet asking questions like 'why aren't the costs being disclosed to the Australian public'?
    TrevorX