NBN Co has negotiated early access to Telstra’s infrastructure to fuel the rollout of its fibre network at the planned second release sites, ahead of the finalisation of what NBN Co chief Mike Quigley described this morning as the pair’s “hideously complex” permanent arrangement.
The second release sites comprise an additional 19 locations – 14 new locations, and five locations adjacent to the existing NBN first release rollout zones – where the fibre network will be rolled out next around the nation, ranging from Brisbane to Casuarina in the Northern Territory and the broadband-starved suburb of Gungahlin in the ACT.
Facing the Federal Parliament’s NBN committee this morning in Sydney, Quigley acknowledged NBN Co was facing difficulty hitting the full throttle ‘go button’ for the NBN fibre rollout because of the lengthy negotiations between the company and Telstra over the pair’s $13 billion deal, which will eventually see Telstra’s fixed-line customers transferred onto the NBN and NBN Co given access to Telstra’s infrastructure (for example, underground ducts where cables can be laid).
“It is a fact that the Telstra deal has taken somewhat longer to finalise than we would have liked,” Quigley said, noting that much of the problem was that the deal was not only a commercial arrangement, but also the Federal Government’s vehicle for the long-awaited structural separation of Telstra into retail and wholesale arms.
“We really can’t press the final go button on ramping into volume until we have that deal finalised,” he said.
The finalisation of the deal has been a “constraint” on what NBN Co can work on, Quigley acknowledged, but in the meantime it was getting on with projects it could progress – such as the implementation of business and operational support systems, and the rollout of the complementary satellite and wireless networks.
Last week NBN Co announced it would start providing wholesale access to a nation-wide satellite service from July this year, following the signing of two interim deals with satellite providers Optus and IPstar, worth $200 million and $100 million respectively.
However, in the meantime – as foreshadowed earlier this year – Quigley said NBN Co had negotiated to get early access to Telstra’s infrastructure in the early stage release site areas so that work could progress.
“We have negotiated with Telstra a way forward on those second release sites … we should be able to do something a little earlier,” he said.
Telstra chief executive David Thodey several weeks ago declined to provide detailed information about the ongoing negotiation process with NBN Co; asked about the deal this morning, Quigley took the same approach, noting as well that there would be some impact on NBN Co’s business plan from the delays – although he couldn’t calculate that impact just yet.
“It would be unwise of me to comment on when the Telstra agreements will be signed,” he said. “We are coming close to the final stages of it, but there are some months beyond that.” The executive pointed out the deal had to be approved by the Australian Competition and Consumer Commission, as well as receiving approval from Telstra shareholders.
“We made an assumption that the deal would be done by June of this year – clearly it’s not going to happen by that date,” he said.
Image credit: NBN Co