Telstra deal may delay NBN second release


Fledgling fibre monopoly NBN Co this afternoon said the delay in finalising its $11 billion arrangement with the nation’s largest telco Telstra could affect the timing of the delivery of services to the second wave of release sites as part of the national fibre rollout effort.

This morning, Telstra revealed it had been forced to delay a vote to be put to shareholders regarding whether it should go ahead with its $11 billion deal to transfer customers onto the NBN as the new fibre monopoly rolls out its infrastructure around the nation. Previously scheduled to take place within the first half of this year, the vote will now take place after 1 July.

In a statement this afternoon in response, NBN Co said it was committed to working on the second wave of sites to be constructed as part of the NBN, but the Telstra delay “above could affect the time between construction and the availability of services, depending on a number of issues that are still being worked through”.

“In relation to Second Release Sites, detailed planning is progressing but we have not yet announced a commencement date due to two important considerations,” the group said. “NBN Co needs some additional time to address network planning and design issues as a result of the ACCC decision in December to require 120 points of interconnect (PoIs), up from 14 POIs in the original design. As you know PoI is a significant component of the network design as it is where data is transferred from NBN Co’s network to the networks of retail service providers.”

“NBN Co is also in the process of finalising its deal with Telstra to access its network infrastructure. The deal with Telstra will lead to less community disruption and reduce rollout costs. It is therefore better for residents and better for taxpayers to await this agreement.”

Despite the issues, NBN Co said it was “committed” to working on the second release sites.

Like the first wave of NBN release sites (which will not be affected by the timing of the Telstra deal), the second release sites are scattered around the nation, ranging from Coffs Harbour in New South Wales, to inner north Brisbane, Toowoomba, Victoria Park in Perth, Geraldton and so on. The ACT area of Gungahlin – which has long suffered from a lack of sufficient broadband infrastructure – is also on the list.

NBN Co had previously stated that construction in the second release locations was scheduled for “the second quarter of 2011”.

But this morning, NBN Co said it had been advising communities with second release sites that both the Telstra deal and the Australian Competition and Consumer Commission’s decision on the number of points of interconnect required were “being factored into the timing of future rollouts”.

“A definitive agreement between Telstra and NBN Co will be good for Telstra, good for NBN Co and good for the country,” said NBN Co chief executive Mike Quigely. “It is therefore worthwhile taking the time to get the right outcome. A deal will lead to less disruption for the community, and reduce our rollout costs. It is better for the community and better for taxpayers.”

Image credit: NBN Co