Internet service provider Eftel has signed an agreement with NEC-owned Nextep Broadband, giving it sole access to certain equipment in telephone exchanges which will increase its new broadband network by around twice its current size.
Equipment in around 80 exchanges is covered by the deal, which will result in a 55 exchange net expansion of Eftel's network. Although EFTel had not put an exact figure on the agreement yet, Eftel chief operating officer John Lane said that in the short term it would provide Nextep with around $1 million a year.
Eftel had announced plans in November 2007 to build a new network called BroadbandNext with equipment capable of delivering VDSL — touted as being four times faster than ADSL2+. The first phase would extend to 70 exchanges, 15 every month from February 2008.
At this point only 60 have been completed and turned on, although all 70 have now been approved for installation, with Lane blaming exchange queues for the delay.
Phase two was to roll out equipment in another 31 exchanges, but the signing of the Nextep deal has made it possible to push that back, according to Lane.
The Nextep DSLAMs won't be capable of providing VDSL, but that's beside the point, Lane said. "The motivation for building one of these networks is not just to have a better product than your competition, it's also to lower your costs," he said, saying that most customers would be using DSL1 on the network, but on Eftel's or Nextep's infrastructure instead of using Telstra's ports.
"[The customers] can't tell the difference, but from our point of view, the costs are much less," Lane said, saying that providing DSL through Eftel or Nextep equipment halves the expenses for the company.
VDSL won't get off the ground until the national broadband network gets underway in any case, Lane said, because Telstra won't allow it on its network.
"The excuse they're using is it will be an ideal technology for their node-based network," Lane said, with VDSL equipment at exchanges set to interfere with maximum speeds possible using the same equipment at the nodes.
Pipe Networks has been providing the backhaul for the first seventy exchanges, but Lane said the company had not settled on a backhaul provider for the Nextep additions. "We're assessing various vendors at the moment," he said.