Thodey: NBN speeds a hard sell

Telstra chief executive David Thodey today said that realism was needed on how many people would take up high speed services offered by the National Broadband Network (NBN) given that only 5 per cent of the telco's home customers had taken up its fast ADSL2+ service.

Telstra chief executive David Thodey today said that realism was needed on how many people would take up high speed services offered by the National Broadband Network (NBN) given that only 5 per cent of the telco's home customers had taken up its fast ADSL2+ service.

David Thodey at the Symposium
(Credit: Suzanne Tindal/ZDNet.com.au)

"Let's be clear," he said to an audience today at the annual Gartner Symposium in Sydney, "the demand is still latent."

"We offer quite a large number of high speed access technologies today and I think we would be lucky to have even at the home, with ADSL2+, 5 per cent of our customers maybe on 20Mbps," he continued. "I think you've got to be realistic about what the demand is."

He seemed to discount that enterprise would be the saviour of the network's viability. He believed the network was "primarily a consumer home solution", saying only that there would be "some spin off to small business and to some enterprise customers in terms of faster access speeds".

Analysts have in the past questioned the viability of the NBN in the case that users do not take up services, saying that it could mean very high monthly prices. Thodey said cost was a pivotal issue. "Critical to creating value is at what cost you get access to fibre to the home," he said.

Yet after his pessimism, he also said that the NBN would create opportunities for education and would feed the demand for increased network traffic on wireless and IP networks.

"Anyone who says this industry is not exciting is looking at different data," he said.

Thodey also spoke at length about Telstra's core business. "We will never become an IT services company," he said. "We are a managed network services company."

"I think you have to understand what you do and do it well," he said. "We are a network provider. Are we an ERP vendor? Absolutely not."

The two skill sets were different, he said, no matter what people believed. Competitors didn't want one vendor to manage their IT and network end-to-end, he believed. "I think the complexity of networks is far beyond what those people understand. IT companies are not six nines capability," Thodey said.

When questioned about other vendors such as the US's AT&T and Spain's Telefonica, which had gone down the IT path, Thodey was unmoved. "Show me a communications services provider that makes money out of IT services," he asked. "We have been there."