Telstra chief executive David Thodey has maintained a clause in his company’s $11 billion contract with Telstra and the Federal Government unveiled yesterday that will block wireless technologies being marketed as fibre alternatives would have negligible impact on Telstra’s business, despite other company leaders having slammed the clause as being anti-competitive.
In Telstra’s presentation to the Australian Stock Exchange, the company states that part of the NBN deal is that it “may not promote wireless services as a substitute for fibre-based services for 20 years” from the commencement date of the contract, although it “otherwise remains free to compete in the market for the supply of wireless services”.
The news comes as debate has swirled continuously over the past several years — fuelled by comments from the Opposition, as well as certain elements of the telecommunications and business sectors — about the potential for wireless services to act as replacement for fixed-line broadband. Telstra is currently upgrading its flagship Next G network to the Long-Term Evolution standard, which is expected to offer significantly enhanced speeds and broadband capacity to Australian users.
Thodey faced several questions on the matter in a media and analyst teleconference on the deal yesterday morning, however he denied the clause was an issue.
“We have agreed not to actively promote wireless broadband as a direct substitution for fixed broadband … It will have absolutely minimal impact on our business,” the executive said. He added that Telstra had the aim of selling a variety of services into the residential market — fixed-line fibre broadband and voice services, and also wireless, in a comment which appeared to refer to the bundled offerings which Telstra is currently taking to market.
Thodey also noted that Telstra would continue to develop and push wireless technologies. However, the executive added that Telstra’s first priority was to get Australians onto the NBN fibre. “We want to get as many people across to the fibre as possible and get paid for that,” he said.
However not everyone is happy about the clause.
Former AAPT chief Paul Broad, who has long been a staunch critic of the NBN policy, reportedly told The Australian yesterday that the wireless clause in Telstra’s contracts seemed anti-competitive. “That just tells you that they’re going to try everything in the book to make this stack up,” Broad said.
The news also comes as the uptake of wireless broadband has continued to boom over the past several years, with Australians adopting 3G mobile broadband via USB dongles and smartphones in record numbers. In September last year, the Australian Bureau of Statistics released a report showing that there were some 3.4 million mobile wireless broadband services in use in Australia as at June 2010 — a number which had rocked up by about $1.4 million in just a year.
All of Australia’s major mobile telcos — Telstra, Optus and Vodafone — are currently engaged in significant network upgrade projects to deliver higher speeds and capacity to their users — and also to be able to keep up with demand.
Image credit: Telstra