Coalition could revoke Optus and Telstra NBN agreements
- 06 September, 2012 10:26
Malcolm Turnbull, shadow minister for communications and broadband, has said he would overturn existing National Broadband Network (NBN) agreements if a Coalition government was in power.
While Turnbull restated his stance that he would keep NBN Co as a government-owned company to run the NBN, he said he would retain the HFC network in order to remove “barriers to competition” with the NBN.
"...we would seek to reverse the arrangement whereby Telstra and Optus are obliged not to use their HFC to compete with NBN Co on broadband data and voice, the extent to which that is possible obviously depends on negotiation," he said.
This would involve changing million dollar agreements with Telstra and Optus around the telcos decommissioning their HFC networks and migrating customers to the NBN and would include reworking two key agreements in the NBN.
This includes an $11 billion agreement between Telstra and NBN Co, with Telstra to decommission its copper and HFC network and give access to NBN Co to its equipment, and an $800 million agreement between Optus and NBN Co for Optus to decommission its HFC network.
Instead, Turnbull would keep the HFC networks in operation. With Optus due to decommission its HFC network in 2014, the telco may not even begin the transition of customers to the NBN if the Coalition wins the next federal election, which could be held as early as August next year.
Turnbull said he would expect Telstra to co-operate with any changed agreements, with David Thodey, chief executive at Telstra, previously stating a change in government would not affect the company's financial figures.
“If there’s a change of government, the current contracts give us a degree of protection — there’s the infrastructure services agreement, which is a 35-year contract, and depending how far we get, we get the payout on that or we get the revenues as they flow,” Thodey said.
Thodey also stated this year that a FTTN deployment would mean shareholders receive a quicker return.
Turnbull has been a staunch opponent to NBN Co, stating that while it is not ideal to continue to operate the company if the Coalition were in power, he said there seemed to be no other option.
“…it has been and is probably unsaleable in its present state of development and for the forseeable future,” he said.
The shadow minister also continued to push the benefits of a fibre-to-the-node (FTTN) network over fibre-to-the-premises (FTTP) and has repeatedly said a FTTN network would be cheaper and faster to roll out.
“The experience in other markets (USA for example) is that FTTN networks enjoy comparable ARPUs to FTTP networks – the very high speeds (100 mbps plus) available on FTTP are not sought after by sufficient customers at sufficiently high premiums to justify the additional investment,” he said.
“That, at least, is the feedback I have had from telcos in the USA, UK, Canada and several other countries.”
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