First the government announced the NBN. Then they threatened to lay the smackdown on Telstra if they didn’t play ball. Well, it looks like they’ve won, yesterday announcing that they have struck a deal with the Big T to buy access to Telstra’s existing broadband infrastructure, while moving Telstra customers from the old copper network to the new NBN.
The agreement – which still needs to be signed of by Telstra shareholders – essentially saves time and money in rolling out the NBN, as the Government won’t have to rebuild the basic broadband infrastructure that Telstra already has.
Telstra will then lose its position as a broadband wholesaler, meaning it won’t be able to set pricing for other ISPs to use their infrastructure, which should lead to lower broadband pricing across the board. Which is kind of exactly what the Government threatened to do when they told Telstra they’d introduce legislation to see them structurally separate. The telco will also transition its customers to the new fibre network and then shut down their copper and cable networks.
So far, it all sounds pretty damn good if you’re a customer or Stephen Conroy. But what about Telstra?
Well, the Big T gets a $9 billion payout for access to their current infrastructure. That’s a fair chunk of cash for something Telstra already owns. They’ll also get $2 billion to cover the cost of setting up a new company to make sure there aren’t any hiccups along the way, and that everyone can still call emergency numbers during the transition from copper to fibre. Plus $100 million to retrain and redeploy staff.
They’ve also received written confirmation from the PM that should the deal go through, they’ll be able to bid on LTE wireless spectrum. And that’s the big win for Telstra – they’ll be able to take some of that $9 billion, and invest it in improving their already fantastic NextG wireless network to LTE.
So what next? Well, there are a few conditions that need to be met and the proposal still needs the approval of Telstra’s shareholders. Telstra reckons that’ll happen in the first half of 2011. So in other words, despite the fact the NBN should roll out a bit faster now, it’s still a few years away before it will actually be available to everyone.
[Telstra]
Chris Guerin
Monday, June 21, 2010 at 12:12 PMI’m more for the captions that will accompany this photo:
http://resources2.news.com.au/images/2010/06/21/1225882/140050-rudd-and-conroy.jpg
mr-crash
Monday, June 21, 2010 at 1:19 PMI thought all they had signed to was a kind of financial heads of agreement document?
Also, isn’t this exactly what it was before privatisation? Government controlled entity rocking an infrastructure monopoly. Because I don’t seem to remember that working out all that well for the consumer.
Wok
Monday, June 21, 2010 at 1:32 PM$40 Billion NBN… Telstra fails in the bidding but gets 11 Billion of that?
Patrick
Monday, June 21, 2010 at 4:52 PMTelstra is the big winner
Rahul Khanna
Monday, June 21, 2010 at 6:03 PMLong run though, this is a big win. Something like NBN is crucial for the future of this country and the further we move along this path, the better. The added advantage is that this will allow more of the cabling to be underground (keeping our streets looking marginally sexier)
Graham Jupp
Monday, June 21, 2010 at 9:39 PMIt would be interesting to find out exactly how much all that copper wiring is worth assumming they will be ripping it out of the ground once the fibre network is all in place.
Anyone wanna take an educated stab at an answer?
I wonder if they will continue to offer a low voltage power supply to support the older phones, Nanna might have to upgrade her rotary dial phone to something with a power cord and retro geeks will be up in arms.
R3D
Wednesday, June 23, 2010 at 4:34 AMwas talking to one of the workers laying fiber in tasmania and he said it will cost at least $1000 to connect your house to it even after the cables where in the ground, i told him any gamer that had a pc worth 2-3k would easaly see it as viable.
Steven
Friday, June 25, 2010 at 2:41 PMJune 21, 2010 at 6:03 PM
“Long run though, this is a big win. Something like NBN is crucial for the future of this country and the further we move along this path, the better. The added advantage is that this will allow more of the cabling to be underground (keeping our streets looking marginally sexier”
Hey Rahul,
Should take a look at where they are first rolling it out (North West Tasmania). It’s a bloody disgrace, cables all over the place hanging from power poles.
We will now need to spend more tax payers funds on safe driving campaigns so less power poles are taken out in this part of Tasmania.