Vodafone quietly tests NBN Co fibre for tower backhaul

Vodafone and NBN Co have been quietly testing out using NBN Co's fibre as backhaul for Vodafone's mobile network.
Written by Josh Taylor, Contributor

Vodafone is using National Broadband Network (NBN) fibre to supply backhaul to a number of towers in Australia, after years of lobbying the government-owned company for such a service.

For a number of years, as Vodafone plugged billions of dollars of funding into upgrading its 3G network and rolling out a brand new 4G network, the company has lobbied both the Labor and now Coalition governments to allow NBN Co to supply fibre backhaul to Vodafone's mobile towers.

The mobile telco has long complained about the price of transmission services in regional and remote areas of Australia, and helping improve mobile coverage was also one of the key policies outlined (PDF) in the Coalition's election platform last year.

Since December 2013, NBN Co had been working on developing a trial cell site access product with plans to test out the product with mobile telcos. It was reported in January that one — at that time unnamed — telco had been signed on for the trial, which was expected to run until May (PDF).

Late last month, Vodafone CEO Inaki Berroeta told a Trans-Tasman Circle business lunch that NBN Co fibre to Vodafone's cell tower sites would help bring down the company's costs.

"Mobile communication requires a fair amount of backhaul. Transmission in this market is extremely expensive," he said.

"Vodafone Hutchison Australia would pay close to 6 percent of revenues on transmission; this is more than three times what the whole company would pay outside this market. I really want, and I am also watching really closely with NBN Co because this will bring more competition there."

When asked at the time why Vodafone and NBN Co had yet to publicly announce any such cell tower access arrangement, Berroeta said it was a matter for NBN Co.

"I don't know. You should be asking what NBN Co is doing. As soon as I can use NBN Co for transmission, I will use it," he said at the time.

However, ZDNet can reveal that — as previously suspected — Vodafone is already trialling the cell site access product, with NBN Co fibre now currently supplying a "handful" of cell towers, a spokesperson for Vodafone confirmed.

NBN Co CEO and former Vodafone CEO Bill Morrow told ZDNet last week that the trial is progressing well.

"They've been conducting trials with us; we're closer along than most people realise," Morrow said.

"We've been actively engaged, looking at different sites, that kind of thing. I think it has progressed well."

Vodafone is remaining mum on the locations, number of towers involved, and the exact length of the trial. NBN Co also declined to comment on the specifics of the trial, but it is understood that the trial has extended well on since May.

Morrow could not say when NBN Co would launch a commercial product, but said Vodafone is eligible to use the product because it had signed up as a retail service provider in 2012, although the company has yet to add any fixed-line commercial customers.

NBN Co's own fibre backhaul product is likely to face pushback from the fibre backhaul industry. Pipe Networks, now owned by TPG, argued in 2012 that NBN Co's entrance into the market would be anti-competitive.

"Intervention in this market by a taxpayer-funded entity such as NBN Co will reduce network extension by existing and emerging private fibre providers to the detriment of the industry, the market, and the end users," the company said at the time.

Vodafone is one of Pipe's customers, signing a backhaul deal in 2010.

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