Eftel, Dodo sign up for NBN

Eftel is on the road to becoming a wholesale aggregator for National Broadband Network (NBN) services, today announcing that it has signed a deal to take part in mainland trials with Dodo as its first wholesale customer.

Eftel will join over a dozen retail service providers (RSPs), including Optus, Telstra, iiNet, Internode, Primus, Vodafone and Exetel that have already signed up to offer services on the NBN at the five mainland trial sites, and have gone through the on-boarding process that ensures their systems will work with NBN Co's. Eftel chief Scott Stavretis told ZDNet Australia that he expects this to take about eight weeks.

From there, Eftel expects to bring on trial customers on the mainland site, first with ClubTelco, which it recently merged with, and then with Dodo. Stavretis said it wouldn't matter where on the mainland Eftel's first customer was located.

"To us, the first stage is just a trial, where the sites are fairly irrelevant. That trial is more important for NBN. For us, how we see the customer in our network is no different," he said. "So we just want to get some customers on the network, understand utilisation patterns so we can then understand modelling and pricing needed when we do go mass market."

Eftel has yet to announce its own retail pricing, but its first wholesale customer, Dodo, expects to offer NBN services below $40, according to CEO Larry Kestelman.

"We don't see any reason why we can't have an entry-level product at the sub-$40 market as we do now," he told ZDNet Australia.

Kestelman said that the reason Dodo would be able to offer lower prices to that of Internode, which sparked controversy with its prices last week, is because Dodo has lower margins than other telcos.

"Dodo, we've been used to the wholesale margins from day one. We buy currently through Telstra and Optus ... whereas the Internodes of the world have been running their own networks and their own DSLAMs," he said.

"Our margin is not going to change tremendously on the NBN. We've had to learn to operate our business a lot leaner than others to be able to deliver the prices we do today. For us, NBN is just another network we're buying from."

Stavretis said that Eftel had been in talks with Dodo about their pricing plans.

"We've had discussions on pricing with Dodo; how they actually play to the market is their call, but they're aware of the costs and what's associated. Anything we can do to help them drive the lowest price in the market is good for us," he said.

Kestelman said that telcos will have to diversify the products they offer in order to compete on the NBN.

"We've been prepping our business for NBN for a long time. We've got multiple products we offer, like retail electricity, things like home security and everything in one for the house," he said. "I think anyone who just [offers internet services] is going to struggle because we can do things cheaper because we've got multiple products to offer the client."

He flagged that Dodo would begin offering IPTV on the NBN.

"I think IPTV is something we will definitely be offering on NBN. It's not something we've rushed out and offered on DSL, because I don't necessarily think it's the right platform for it," he said, adding that Dodo aims to become a one-stop shop for all home services.

On Saturday, Communications Minister Stephen Conroy praised the indication by Dodo, saying that it showed competition in the NBN world will be fierce.

"I have been saying for some time that access prices on the NBN would be comparable to current prices, and Dodo has shown that will indeed be the case," Conroy said in a statement. "The NBN Co has said that indicative prices were going to be around $53 to $58 for entry-level products, so Dodo's proposed prices for internet access are even lower than those."

In April, Eftel merged with ClubTelco, a separate business founded by Kestelman and owned by himself and Dodo's directors. As part of the agreement, ClubTelco owners received 75.6 per cent of the shares of Eftel.