Telstra CEO: Hands off my backhaul

Telstra CEO: Hands off my backhaul

Summary: Facing a possible ban on bidding for 4G wireless spectrum, Telstra chief David Thodey today warned the government to steer clear of its backhaul networks — its last front for infrastructure competition.

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Facing a possible ban on bidding for 4G wireless spectrum, Telstra chief David Thodey today warned the government to steer clear of its backhaul networks — its last front for network-level competition.

David Thodey talking to Telstra CFO John Stanhope
(Credit: Liam Tung/ZDNet.com.au)

With the government's threat to bar Telstra from participating in next-generation wireless spectrum auctions, expected after 2012, Telstra chief David Thodey played up the company's right not to sell its backhaul networks.

Answering a question from Deutsche Bank analyst, Sameer Chopra, Thodey declared Telstra's backhaul network as "core" to its business.

"Are we willing to consider them having access commercially, wholesale? Of course we are, but there are certain assets that are core to this business, and we do not have any intention or desire to vend these assets in," said Thodey.

Telstra's Next G mobile network in conjunction with its extensive backhaul network is set to be the last front the telco can fight competitors at an infrastructure level. Telstra chief financial officer John Stanhope today said that once Telstra has been separated, differentiation would need to occur above the network layer, which would include billing systems, products and services.

Thodey went on to explain that when it came to mobile services, there were two considerations: spectrum and backhaul. While the government had control over spectrum allocation, Telstra controls its own backhaul network.

"I want to stress," said Thodey, "that our mobile network is second-to-none because we have fibre running to all the base stations." He clarified that 85 per cent of its mobile base stations were Ethernet connected. "So the backhaul is second to none. And remember that's where many mobile operators have fallen foul as the data volumes have increased," he added.

The Federal Government is currently assessing bids for its $250 million tender to build key backhaul links in rural areas where Telstra has enjoyed a monopoly.

Topics: NBN, Broadband, Government AU, Mobility

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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Talkback

50 comments
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  • Enforced sale please

    Take it all, I say - including Next G built with cash garnered from the taxpayer-owned fixed network. Kill off Telstra and let a plethora of smaller, customer-focused Australian companies take up the slack.
    anonymous
  • Telstra vs. the People of Australia

    Regardless of "intention or desire", infrastructure built with taxes, not investor's capital, is not private property and no "conservative" government can alienate the people's title to it. [IMHO]

    Telstra does NOT own the copper local loops, nor the "golden boomerang" backbone network. Every bit of infrastructure (and the real estate involved) that was built by the PMG, Telecom Australia, Aussat and OTC should be immediately seized and placed under a new company with [initial] 100% government ownership. When Australia has communications facilities comparable to Japan and other OECD countries _then_ the "private versus public" issue might become sensible.
    anonymous
  • Aussat

    The Fraser govt's Aussat debacle ($1billion red ink) provided the entry opportunity for Singtel to create Optus as a telco in Oz.
    anonymous
  • Australia backs Telstra.

    Surprise, surprise the advantage seeking freeloaders are still with us.

    The lunacy talk of "the Australian shareholders don't own Telstra" resurfaces, even with the fact that Australians paid $60 billion for it.

    Mr Thodey and Mr Stanhope are on the right track, and while they may assist NBNCo survive, their entire focus must be to ensure a strong Telstra for all Australians.
    anonymous
  • Ownership

    Bruce,

    What about anynetwork that has been built since privitisation? Are you saying that the infrastructure that a private company has built should be just seized from that company?

    By your reckoning any company that has constructed any sort of assett is open to have their assetts seized by an ocer zealous government!

    Last time I checked this was Australia not communist China!!!
    anonymous
  • Please Sydney...

    do not use the word "freeloaders" as you can't even answer a simple question. Why is TelstraClear not investing in it's own infrastructure in NZ but choose to freeload on NZ telcom? or why is the great australian icon deliberately holding back australia? I tell you why, because you are a greedy TLS shareholder who's only interest is yourself. You have no insterest for Australian consumers as you pretend to be.
    anonymous
  • Sorry Dude

    Sorry mate.

    Telstra has lost. They can fight, they can moan, they can carry on but in the end, they will loose.

    Thodey is putting up a front to 'save face' but in the end they will loose... Thats politics. There is no way the Lib's would go to a DD with this too. Going on recent polls they are going to be slaughted anyways..

    I am not sure who you are reffering to with the comment of freeloaders however?
    anonymous
  • Telstra's Network, Not ours

    The network belongs to Telstra, not taxpayers, they have built the network using the money we have payed them since the 1950's when they were privatized to use their network.

    You could say that the modern network in its entirety was payed for using the money they earned, not the money loaned at the very start.

    So feel happy we have a fast broadband network at all, because why should Telstra innovate anything else, when the Government will promptly steal it claiming it as "ours", when it isn't, and then promptly make everything more expensive trying to claim back the huge cost of buying out Telstra's Assets.

    And all the while, the NBN still won't have been built, not that it will anyway, because 43 Billion might do FTTP to half of Australia at best, and that doesn't include buying Telstra.
    anonymous
  • It belongs to TLS shareholders - WITH LAWS AND REGULATIONS

    Again for those who wish to rewrite history.

    Please explain how the "High Court of Australia" could get it so wrong and you get it so right?

    Scroll down to Page 5 ... http://www.ags.gov.au/publications/agspubs/legalpubs/litigationnotes/LN16.pdf

    http://www.minterellison.com/public/connect/Internet/Home/Legal+Insights/Alerts/NA-+Telstra+fails+in+its+constitutional+challenge

    Alex, I await you stunned silence (like I have received from all other TLS shareholder) with bated breath!
    anonymous
  • For the love of God!

    When a gov't privatises a company, they are effectively selling it, so even if it was built with taxpayers money, it's irrelavent because it was bought with shareholders money, and that money has long been spent by the government.

    Why you buy your house you dont expect the builder to turn up in 10 years later and demand the bricks back because it was paid for with his money!

    Please keep away from the 'add your opinion' button until you complete 5th grade!
    anonymous
  • Moot Point

    Your analogy is quite moot.

    Not sure of what state you live in, but using your 'building a house' - The govt has every right to take your built house 10years later and your land aswel if its for the purpose of building something that will benefit to greater the community. I.e. That brand new spanking 8 lane highway.

    I know the point you are trying to make, but there are better ways of saying it.
    anonymous
  • Depends

    If the government takes you're house you will expect compensation. If telstra is split then 2 things will happen, either the shareholders get shares in the new wholesale company which will be a wholeseller monopoly, or the government will need to buy the whole sale component off telstra, which would be billions of dollars. From what the government has said it is likely to go with the first option.
    anonymous
  • re Please Sydney...

    Why don't you move to NZ. Seems they are of major interest to you.
    anonymous
  • Yep, For the love of God!

    Hear hear, but I don't think he will hear you, on that point.
    anonymous
  • More of a Moot Point

    Sorry Jim, but we are not as smart as that sausage man and his cronies (sic).
    anonymous
  • Desperate disgusting Telstra desperados

    Gee look Sydney, Vasso and Mike have disappeared and magically a new batch of Telstra goons have appeared.

    You guys seriously are *&^%$#
    anonymous
  • @For the love of God

    The PSTN was originally a government monopoly which was vested to Telstra (in 1992 Steve) and later sold to TLS shareholders.

    WHILE IT DOES NOW BELONG TO TLS SHAREHOLDERS - IT BELONGS TO THEM WITH STRICT RULES & REGULATIONS (the bit all Telstra puppets like to forget or simply are unable to comprehend).

    It's not hard to understand if you don't have a TLS portfolio clouding the senses!

    So talking about when you buy a house, you buy it and it is yours - "but there are still rules". Perhaps such as, you cannot knock it down and build a pub. Or you cannot drill for oil or mine for minerals, whatever. There are rules.

    Telstra are not above the law and must adhere to the privatisation (access) rules and regulations and no amount of shareholder greedy comments will alter that!.

    But rather than buying a house, what if you are actually "given or vested" a house, with the proviso, others can use the house too and they even have to pay you rent?

    Well "prior to privatisation" Telstra were vested not just "a house, but the entire Australia wide, multi-billion dollar government owned, monopoly, PSTN", under this type of usage/rental arrangement and they make $b's in profit each year from it...

    BUT STILL WHINGE AND WHINE, UNBELIEVABLE!
    anonymous
  • Try again communist

    Infrastructure built by the government with taxes is the government's property until the government sells the infrastructure to private people.

    As far as suggesting telstra does not own these assets- that is simply not true. The High Court in 2008 confirmed that Telstra does own its CAN but it is subject to an access regime. i.e. Network owned by Telstra. Network access regulated by ACCC.

    Also if the government owns Telstra's network can we all get our $7.20 per share T2 payment back?
    anonymous
  • Communist - says the burned greedy TLS shareholder

    Settle down burned, greedy shareholder. And no you can't get your $7.40 (not $7.20) back.

    You bought shares in our NON-COMMUNIST SYSTEM but now want the government to bail you out Communist style, lol! Whose the Commy here me or you?

    Yes Telstra shareholders own the assets, I never said they didn't, so your point?

    But thank you for at last agreeing competitors are legally allowed access and are not leeches, which has been the crux of the problem for years.

    Here's more from the High Court. Mar 08 -

    ... it proceeds from an UNSTATED PREMISE THAT TELSTRA HAS LARGER AND MORE AMPLE RIGHTS IN RESPECT OF THE PSTN, THAN IT HAS. But Telstra's "bundle of rights" in respect of the assets of the PSTN has never been of the nature and amplitude which its present argument assumes. TELSTRA'S BUNDLE OF RIGHTS IN RESPECT OF THE PSTN HAS ALWAYS BEEN SUBJECT TO THE RIGHTS OF ITS COMPETITORS TO REQUIRE ACCESS TO AND USE OF THE ASSETS...

    In other words Telstra puppets, Telstra went into court believing they had absolute control (Telstra's unstated premise of larger and more rights, than it has) in regards to the PSTN. But their (bundle of) rights solely depends upon the rights of competitors accessing their network.

    I put it to you now that as Telstra have admitted they were misleading and deceptive in not allowing access, they have not only breached the ACCC rules but they have breached their bundle of rights to ownership!

    As such a court case could and probably should, be mounted to relinquish Telstra of their ownership, due to this breach!
    anonymous
  • re please Sydney

    Anyone notice how on other threads this same question has been asked by non other than the insulting sewer dwelling RS?

    Check another article Telstraclear is now investing in New Zealand the way other companies are here.

    Suprise suprise.
    anonymous