Australia’s number two telco Optus has “cautiously” welcomed a wide-ranging deal revealed today between Telstra and NBN Co; however the SingTel subsidiary also emphasised what it said was the continuing importance of legislation to reform the telecommunications sector as a whole.

This afternoon Telstra revealed it had signed a preliminary $11 billion deal with NBN Co that would see the telco migrate its telephone and broadband customers onto the fibre National Broadband Network, with its copper (ADSL) network to be shut down and no more broadband services to be provided over its HFC cable network.

“Optus cautiously welcomes today’s announcement as a potential step in the right direction,” said Optus director of Corporate and Regulatory Affairs Maha Krishnapillai in a statement. “This is an important step forward in ensuring we can deliver the competition in the fixed line market that all Australians deserve and offer affordable high speed broadband from coast to coast for the first time.”

“However it is important to note that a number of key details are still to be finalised.”

Optus has been publicly lobbying for telecommunications reform legislation which could have seen the break-up of Telstra — as part of wide-ranging telco sector reform — to be passed through the Federal Parliament.

“The rollout of the NBN is not just about building the network, it’s vitally important that it goes hand-in-hand with reform of our sector,” Krishnapillai said. “In light of today’s announcement we remain committed to a wholesale only NBN and the need for a level playing field in the fixed line market.”

Telstra said today that it had received written assurances from Prime Minister Kevin Rudd that sufficient “regulatory certainty” would be provided that would allow its deal with NBN Co to go ahead. In addition, the Government has committed to allowing Telstra to bid for wireless spectrum it will require for the future development of its mobile networks, and Telstra will be allowed to keep its HFC cable network to deliver Foxtel pay TV – although it will no longer be used for broadband services.

The developments have the potential to change the provisions of the telecommunications reform legislation previously being pushed by Communications Minister Stephen Conroy, although it remains unclear to what extent the legislation could be changed.

“The Australian Competition and Consumer Commission will review the competition aspects of this agreement as envisaged in the Telecommunications Competition and Consumer Safeguards Bill, which the Government still hopes to pass to provide greater certainty to industry,” said a joint statement issued by the offices of Conroy, Rudd and Finance Minister Lindsay Tanner this afternoon.

But Optus said the bill must still be passed.

“It’s more important than ever that the Regulatory Reform Bill is passed quickly as this legislation contains fundamental and crucial protection for the taxpayers of Australia by ensuring any Telstra deal represents demonstrably fair value for taxpayers and is open to ACCC oversight,” said Krishnapillai.

The Opposition has slammed NBN Co’s $11 billion deal with Telstra , describing it as Labor’s “desperate” attempt to progress its National Broadband Network policy “by throwing billions of dollars of taxpayers’ cash at it”, and adding that it would cancel the deal if elected.

Image credit: avlxyz, Creative Commons

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