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Alcatel waits in the wings

Alcatel is playing cheerleader for Telstra in trying to get a good deal from the competition regulator for the telco's proposed new broadband network.
Written by Renai LeMay, Contributor
commentary When Telstra put its plans to build a national Fibre to the Node (FTTN) broadband network on hold in December it must have been a tense day at Alcatel's Australian headquarters in the Sydney suburb of Alexandria.
Renai LeMay, ZDNet Australia
Just one month before, Telstra had named the vendor as a key hardware supplier of the new network, which was billed as delivering broadband speeds of 12Mbps or greater to four million addresses.

Telstra said Alcatel will also supply other pieces of hardware and services to aid the telecommunications carrier's overall transformation of its infrastructure.

Alcatel won't say how much of its AU$3.5 billion memorandum of understanding with Telstra is dependent upon the FTTN component, however it is likely to be a substantial portion.

Probably enough to cause a few long phone calls between Sydney and Alcatel's global headquarters in Paris when Telstra put the network on hold due to concerns government regulations would force the telco to allow competitors the same access they currently get to its existing copper network.

Telstra and the nation's competition regulator are currently hammering out a deal under which Telstra would build the network, but some commentators think the process could take a year or more.

These are the difficulties facing Alcatel's new Australian chief Hilary Mine, who has only been in the country six months after relocating from Texas for the role.

And Mine's not the only fresh face amongst Alcatel's local management -- the vendor's chief technology officer Ric Clark took up his role just three months ago, and Shirley Cotterill will move from rival Nortel to head up Alcatel's Telstra account on May 5.

With all these factors in the pot it's not hard to see why Alcatel is playing cheerleader for Telstra in trying to get a good deal from the Australian Competition and Consumer Commission (ACCC) on the proposed FTTN network.

Back in February Alcatel president and chief operating officer Mike Quigley reportedly spent several days in Canberra making Telstra's case for regulatory certainty on the FTTN investment.

With the success of a AU$3.5 billion contract on Alcatel's mind, it makes sense to pull out the big guns.

In addition, just this morning a report landed on your writer's desk, penned by Alcatel with help from consultant KPMG, claiming to have identified "a number of regulatory levers and policy options that could be used to encourage next-generation broadband infrastructure investment in Australia".

Alcatel has always emphasised the FTTN component of its deal with Telstra depended on favourable regulatory conditions, but will Alcatel's shareholders see it that way when the negotiations stretch out?

Perhaps that's why the report states that "time is of the essence" if Australia is to play host to a next-generation broadband network of the type Telstra put on hold in December.

"Australia must act soon or risk falling behind. Doing nothing is the worst outcome of all," the report advises.

It certainly would be for Alcatel.

What do you think? Will the ACCC and Telstra come to a deal on a FTTN network or will Alcatel end up empty-handed? Send your thoughts to renai.lemay@zdnet.com.au.

For more views from the trenches of Australian telecommunications, visit my blog:
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