Optus NBN plan would kill DSLAMs humanely

Optus NBN plan would kill DSLAMs humanely

Summary: Optus this week said that although it would bypass telephone exchanges and the ADSL infrastructure within them when building its National Broadband Network, it would do so in an "orderly" manner and guarantee wholesale pricing to ISPs whose assets were made redundant.

TOPICS: Telcos, Optus

Optus this week said that although it would bypass telephone exchanges and the ADSL infrastructure within them when building its National Broadband Network, it would do so in an "orderly" manner and guarantee wholesale pricing to ISPs whose assets were made redundant.

There won't be a DSLAM graveyard
pileup under Optus' bid

(Credit: Dead Cities by mugley, CC2.0 )

"That asset is going to be stranded at some point in time," Optus director of government and corporate affairs Maha Krishnapillai told ZDNet.com.au, stressing that it was inevitable when rolling out a FTTN network. DSLAMs are the networking equipment in telephone exchanges that make ADSL broadband possible.

However, that did not mean that companies such as iiNet and Internode, whose businesses are currently based on having their own equipment in exchanges, were heading for sudden and disastrously high write-offs, he said.

"We will work with the suppliers who have those arrangements to have an orderly transition, which is one of the main reasons they are part of the bid," Krishnapillai said. Terria, which has as its members Internode, iiNet, Optus, Macquarie Telecom and iPrimus, is backing the Optus bid to build the national broadband network.

Not only will DSLAM-centric companies receive a smoother ride under an Optus bid, their margins will be protected, Krishnapillai said. "We will guarantee that the pricing will not be any higher than they have [now using DSLAMS]," he said.

Krishnapillai said he didn't think that there would be any hesitation by rival bidder Telstra to cut off its competitors' infrastructure as soon as possible, and he thought that the big telco wouldn't use kid gloves when it did. "I suspect there will be a couple of court cases there," he said.

Telstra was unable to comment on the issue in time for publication, however in the company's regulatory submission to the government in June Telstra said:

"The Government will need to make a decision as to whether it will compensate the owners of DSLAMs that are rendered obsolete as a result of its commitment to the rollout of the NBN. To inform this consideration, Telstra advises it has DSLAMs deployed in 2751 exchange service areas as at 17 June 2008. Telstra estimates that non-Telstra providers have deployed DSLAMs to approximately 530 exchange service areas."

Krishnapillai didn't go into the details of how this "orderly transition" would go ahead without delaying the schedule for the network's rollout.

David Kennedy, research director at analyst firm Ovum, said that the idea of the outside-in rollout could be how the company planned to progress, explaining that if the regional areas received NBN infrastructure first, the exchange infrastructure in metropolitan areas could remain in use for longer.

"It could be a little more self-interested than they're letting on," Kennedy said of the regional-first strategy Optus is proposing to let the bush have a fair go.

However, when iiNet managing director Michael Malone was sounded out on the issue, he said that over 90 per cent of households in metropolitan areas already had access to ADSL2+ speeds, meaning the priority had to be elsewhere.

"No matter who wins, I reckon that if it is done "inside then out", then regional Australia will never ever get done," he said. "If the builder is forced to start in the under-serviced areas, they are incentivised to get them done fast, so they can get to the more lucrative metropolitan exchanges as soon as possible."

Topics: Telcos, Optus

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • iinet

    Maybe iiNet should be the ones leading this NBN rollout - they are the only ones who seem to say things that make sense and without doublespeak. All other comments seem to be put through a marketing filter with all useful content stripped out.
  • Investment is trashed - reason for apathy to NBN


    I wonder if the investment by all the telcos (Telstra and all the others) in DSLAM's has anything to do with their tardy approach to the NBN.

    It is doubtful if they have achieved their target ROI and when FTTN ot FTTH is rolled out - DSLAMS are no longer needed in exchanges.

    It would be reasonable to believe that the lost investment ROI on DSLAMs will be passed on to FTTN/FTTH subscribers.
  • Optus to milk dslam and defer fibre for as long as possible

    Yes iinet seem to make comment's that are less camourflaged.

    But what's interesting now is finally your getting a little more detail about Optus's motives.

    Optus suggesting running fibre in the regions first is not about anything else but protecting the dslam investments.

    As well as optus continuing as long possible to lease from Telstra at the current copper pricing.

    Otherwise as the winners of the NBN it would seriously lose money if it were using its money first (as oppsed to the govt's) to run fibre to uneconomic areas first.

    That why it does NOT WANT to run the NBN,
    It is NOT CAPABLE of running the NBN,
    It has not and will not find the money for the NBN
    And It WILL NOT be running the NBN.
  • lets milk it some more!!

    Sorry MoTT but all the other added together would not come close to Telstra investments...they would simply love to sponge some more...............
  • pffft!

    yeah its horrible and evil of optus, running fibre in woop woop first, you know, where they dont have anything currently... this only serves their own interests of course! (im going to point out im been a tad sarcastic here for humourous effect, and to make sure no1 things i may o gone pro-telstra for a moment *shudder*)
  • Terria vaporized as will Optus' bid.

    Fact is if Telstra won it would use Govt money to run fibre anywhere the govt would want to run fibre first.

    But the Telstra money would be used to SIMULTANEOUSLY run fibre where it would make the greatest economic return.

    Optus - Alas the farce is coming to end, just as the hollow pretence that was Terria came to steaming brown end a few weeks ago.
  • NO no No!

    You sir dont have a firm understanding of the BB infustructure. Optus are Protecting thier Cable invesments in the metro areas by roling out regional first :)>

    In saying that, The only one the SHOULD NOT BUILD THE NBN IS TELSTRA. We will end up with less than we have now for more if telstra win the bid.

    Fingers crossed anyone other than telstra get the contract!. Say NO to High prices, crap service - Say NO to Telstra
  • Sorry mate cheack your facts

    Really sick of people saying other companys are sponging of telstra infustracture.

    The fact is they are not in any way shape or form "sponging" and time and time again are refused BY TELSTRA acess to install thier own EQ to services customers.

    If anyone is to accussed of sponging it is telstra itself. Sponging of the Australian people charging like a bull in a china shop but delivering Chiness Knock off grade product!


  • no doublespeak?

    I agree that iinet tends to come to the point and that is nice to see. However they are not always clear. Using buzzwords like 'incentivise', which is not a real word, can cause confusion.
  • shill

    Looks like the Telstra PR department got onto the interweb this morning!
  • amazingly, it is correct


    according to te COED it IS actually a word. The intention was pretty clear to me, at any rate.
  • One bid to rule them all...

    There's only one bid that deserves the NBN, and it's "anyone but Telstra".

    If Telstra is split into completely separate wholesale & retail companies, THEN it's possible. Otherwise, we're just strengthening the monopoly they already have.
  • @shill

    yeah just before you tttt guys did, obviously.
  • well,

    there shifts do start at 6am in the morning, you wouldnt expect tttt to be up that early without pay either would you?
  • Get real Anonymous for Australia's sake.

    With respect Anonymous your above statement of lunacy contains not one redeeming feature.

    Do you understand the horrific financial dilemma the Australian taxpayer will find themselves in if other than Telstra win the NBN build.

    Do you think it a good idea that Australia's vital communication system be under the control of foreigners. Do you consider it sensible that a company without financial capability be granted the build.
  • Coooeeeeee.

    You're floggin a dead horse Mate.
  • Optus consortium of one. Ha Ha. lol.

    Anonymous please what fools do you think you deal with here?

    Telstra is in fact the only bidder that doesn't demand a monopoly.
  • come the war

    come the war with singapore sydney I'm sure it wouldnt be to hard for us to send the soldiers into the HQ of fibre and make sure they dont hit that big red detroy all button... but also, syd, if we go to war with america? 1 of them are in charge of telstra at the moment, should we be worried about that as well, and while were at it, perhaps we could round up all non-patriotic aussies, you know, lest they sabotage us as well...?
  • our saviours

    yes you would, they are there to save us all from the evil telstra. lmfao. they should never sleep.
  • @cooooeeeee

    no hes not sydney, he has one vote. haha