iiNet open to Coalition NBN offers

iiNet would be willing to sell more of its infrastructure, including its extensive fibre to the node network to a Coalition government, should the party win the September federal election.
Written by Josh Taylor, Contributor

iiNet CEO Michael Malone has said that iiNet is "not an infrastructure company" and would look to sell its other network assets to an NBN Co under the Coalition government should the party win office in September.

Australia's number three internet provider today revealed it had entered an agreement with NBN Co to sell TransACT's fibre to the premise network covering 8,500 houses for AU$9 million. Subject to the completion of construction for an additional 4,500 premises, this deal will be worth AU$14 million if it is approved by the competition watchdog.

The fibre to the premise network is just one of many networks iiNet has acquired as part of its acquisitions of TransACT and Internode. The company now owns hybrid fibre coaxial (HFC) networks in a number of locations and a fibre to the node network in the ACT. Malone told ZDNet is not a business iiNet particularly wants to be involved in.

"We don't see ourselves as infrastructure builders. It's not our purpose. We do it where we have to, where there's no alternative, where it is the best way to get the best price for our customers," he said.

He indicated that 130,000 households in Canberra were passed by the company's FttN network, and he said that the nodes for that network were less than 300 metres from each premise, meaning that when upgraded to VDSL2, connection speeds could potentially achieve 80Mbps.

Malone said that should there be a change of government, and the Coalition pursues a fibre to the node policy, he would be open to offers to buy up this network.

"If there is a change of government in September, I think our fibre to the node infrastructure in Canberra in particular is of particular interest," he said.

"There's 130,000 households that are presently getting, I'd say 80Mbps. I'd hope that the assets we have in the other locations, we could cut a deal with NBN Co. There's no point in overbuilding us."

Shadow Communications Minister Malcolm Turnbull has not said whether his policy would see more private assets acquired by the government-owned company, but he has indicated he would lift the ban on infrastructure competition against NBN Co, which would allow a company like iiNet to expand its network footprint.

Overall, Malone was pleased with the deal with NBN Co. He said the value of the deal was equal to the value of the network asset on iiNet's balance sheet.

While TransACT had operated the network as a wholesale network, handing it over to NBN Co would mean that customers could switch to other companies that previously hadn't offered services on the network, such as Telstra, Optus, and TPG. Malone said that this was the one downside.

"We presently have these customer and they're our customers. The downside for us is that these customers could just as easily move across and become Telstra customers," he said.

But Malone said that iiNet's fibre plans were value for money, and he was confident customers would switch over to the NBN with iiNet.

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