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Telstra could resell broadband on TPG's NBN rival

Telstra CEO David Thodey has said TPG's decision to rollout fibre to the basement in competition with the NBN is not a threat to the telecommunications giant.
Written by Josh Taylor, Contributor

Telstra CEO David Thodey has said TPG's decision to compete against the NBN with its own fibre to the basement service is not a significant threat to Telstra.

This month, TPG has said it will begin to offer services on its fibre-to-the-basement network rolling out to 500,000 apartments in Sydney, Brisbane, Melbourne, Adelaide, and Perth, after it was given the all-clear by the Australian Competition and Consumer Commission.

The watchdog said that TPG's actions did not put the company in breach of legislation designed to prevent telcos from building new fixed networks in direct competition with the NBN because the company was merely utilising its existing fibre networks.

NBN Co is preparing a "commercial response" to rollout its own network in those locations sooner than planned, and the government is also considering forcing companies, like TPG, to provide wholesale access to its retail competitors to be able to also offer their own services on the network.

Speaking at a retail shareholders meeting in Melbourne today, Thodey said he wasn't concerned by TPG's actions, and said Telstra might even seek to offer services on TPG's network.

"It's a little bit of a loophole ... but the truth is, I don't think it is making a significant difference," he said.

"I'm happy with [the government's announcement]. I can resell the TPG offering if that's where it is at."

But Thodey indicated that Telstra following TPG with its own network upgrades might be complicated as part of the AU$11 billion agreement with NBN Co would require the company to move customers over onto the NBN once it is rolled out in a particular location.

"The one consideration for us is that under the NBN contract, if we build new infrastructure and then the NBN comes through, we need to move our services across to the NBN. It's a small consideration," he said.

"In the bigger scheme of that market, it is very small."

That will likely bring relief to NBN Co CEO Bill Morrow, who said earlier this month he was concerned that the ACCC's decision to allow TPG to build out its network could lead to Telstra following suit, and potentially undermining the NBN's business model.

The re-negotiations with NBN Co over access to the copper and HFC networks for the company to use for the so-called multi-technology mix version of the NBN were progressing, Thodey said. Despite initial estimations that the deal could be wrapped up by mid-year, Thodey said there was no timeline, and it was up to the government as to when it would be completed.

"We're really in the government's hands in terms of timing from their perspective, but we're making good progress. There is no time frame, we're really dependent on the government at the moment," he said.

"There are no particular issues I'm aware of at the moment."

The framework outlined for the deal in Telstra's annual report suggests that NBN Co would gain ownership of the legacy copper and HFC networks as the rollout progressed. Thodey reiterated today that Telstra would not get "a dollar more, and not a dollar less" than the original agreement with NBN Co three years ago.

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