Vocus/M2 consider FTTB rollout to compete with NBN Co, TPG


blog You may recall that several weeks ago, mid-tier telcos M2 and Vocus announced they would merge into a large company with a market capitalisation in excess of $3 billion, in a move that will further cement M2’s place as Australia’s fourth-largest broadband player and further consolidate the already minimalist Australian telecommunications industry. But what was not widely reported at the time was that the merged pair of telcos are also considering pursuing a Fibre to the Basement rollout to compete with the NBN company and TPG, which are already deploying this kind of infrastructure. The Sydney Morning Herald reports (we recommend you click here for the full article):

One option on the table for Vocus is the construction of a fibre-to-basement service, similar to that offered by TPG, which would compete against the national broadband network … “There’s a number of ways to look at user aggregation and FTTB is one of them,” [Vocus CEO James Spenceley] said. “We’ll be looking at it as we bring the businesses together.”

If Vocus/M2 do end up deploying FTTB throughout Australia, there is no doubt this would further undercut the finances of the National Broadband Network, as well as causing further chaos for apartment-dwellers throughout Australia’s cities. You only have to look at this recent article published by iTnews — in which the author has no less than three FTTB solutions to the bottom of their apartment block — to see how chaotic the situation is. Adding yet another player will confuse people further. Yet, that is the mess that the Coalition’s Multi-Technology Mix will leave Australia in. At least we’ll be able to say: I told you so.


  1. There must be quite a lot of fap-err-happy smiles at ACCC today.

    Slapping Telstra on wholesale pricing (the copper reduction angle is a bit of an odd choice, given it’s being remediated and now increasingly expected to be used for FTTN? is this an indirect swipe over the lack of tendering? who knows. would like to try whatever they are smoking though) and now another ISP and carrier are seriously considering competing with NBNco to try and remain profitable.

    So that’s potentially two. Who else is going to jump into the pool?

    Infrastructure competition! 3.0 the “here we go again” edition.

    All thanks to MTM – Malcolm’s Telecommunications Multiplier.

  2. The coalition MTM caused this? There wasn’t a problem with MDUs under Labour (service class zero after 6 years)?

    Quigley wanted to use FTTB as they had no answer to the difficulties of FTTH installations in stratas. Same problem for HFC for Optus (avoided) and Telstra (low penetration).

    Seems people will learn nothing from this policy folly. Conroy best comms minister ever;-) Problem is his questionable revenue model is falling apart without his abuse and threats to any competitors. But not his failing…

    • I’m not arguing the technology, Richard. FTTB is a sensible approach.

      I’m referring to the policy (Malcolm’s) that has lead us down this path.

      Yes, Quigley wanted to use FTTB and there was absolutely nothing stopping Turnbull from extending the existing build to include it; but it disingenuous to ignore history when the option of FTTB was already being considered

      The rest of your comment is the usual claptrap about some perceived hero worship meaning any other points are thus invalid.

      We are where we are because of what NBNco are doing now. Blaming the prior government is just as tired and old and lazy and redundant as the current government doing so.

      • Contrary to brendon’s claim I love going back. My post makes clear NBNCo was prohibited by Labor’s policy from FTTB despite no answer to service class zero. From his link:

        “But it’s [FTTH] a policy decision and the government has been absolutely clear on what the policy is, it’s to provide fibre to the premises into all MDUs. That’s what we’re executing on, that’s what’s happening.”

        This is in April 2013, 4 years into NBNCo and 6 months before the election.

        “NBN Co also claimed that it was connecting homes to the NBN nationally at a cost of between $2200 and $2500 per premises, about two thirds of the cost claimed by shadow communications minister Malcolm Turnbull in recent weeks.”

        Absolute misrepresentation of their actual performance.

        Finally the kicker:
        “At the same hearing, committee chairman Rob Oakeshott asked the government and NBN Co if the corporate plan was still accurate given the delays.

        Representatives from NBN co, the department of finance and the department of broadband all said they remain confident of the latest corporate plan’s accuracy.”

        When is ASIC to review NBNCo, a multi-billion dollar GBE funded entirely by taxpayers, management’s statements.

        NBNCo post election has its disasters (which I’ve commented on) but to believe they started post election is hilarious as your very link demonstrates if you read it (paltry number of premises passed well below CP estimates, cost above forecast, MDU SC0; its all there pre-coalition).

        • “Absolute misrepresentation of their actual performance. ” MT is such a reliable source of NBN stats after all! Its not like NBN were suppressing results of the latest FttP trial either (ones with even lower costings).

        • I did not state all issues stem post election.

          I am suggesting blaming the last government, for this governments decisions, is disingenuous.

          Yes, Conroy was belligerent on fibre, however the fact remains that NBNco did start investigating FTTB.

          To ipso-facto that Conroy’s position would never change regardless, is also disingenuous.

          Turnbull has been equally belligerent over FTTN and using HFC. To hold one party accountable, and not the other, is a pretty good example of bias, frankly.

          Conroy had his moments, so has Turnbull. The outcome has suffered as a consequence.

        • @Brendon

          Right exactly as I posted. Conroy didnt change his position re MDUs.

          Nothing Turnbull has done approaches Conroy’s belligerence. FTTN and HFC are supported by CPP figures. If (as many do here) you claim they’re innaccurate then provide your own to critique (they never do).

          NBNco is a failed policy, as I’ve written the coalition continuation adopts responsibility. But the fibre fanboys refuse to acknowledge policy failures; the situation in the itnews (a link I provided yesterday) article is not because of MTM but the failures of NBN policy.

          • Conroy didnt change his position re MDUs.

            The government was voted out not long after NBNco started investigating. Frankly is it the Ministers fault that NBNco took 6 years to get around to thinking about FTTB, or is it perhaps partly NBNco’s fault too?

            Nothing Turnbull has done approaches Conroy’s belligerence.

            … if you believe that, then salespeople must absolutely love you.

            NBNco is a failed policy..

            NBNco is it’s own worst enemy, but it’s not a “policy”. It’s an entity that is acting on behalf of the government; to hold it culpable is to also hold both major parties culpable.

            It’s an entity that exists because one government repeatedly sold of chunks of Telstra to cash in, and another didn’t have the balls to finally, forcefully separate the incumbent.

            Granted, Conroy did hold spectrum partly to ransom, but the opportunity to split Telstra came and went. It really shouldn’t have.

            You’re still not sore about that are you? :)

            Conroy was many things. But giving Turnbull a free pass because he could not possibly be as bad, is dooming us to repeat history.

            Which, quite ironically, we are.

          • A single example approaching Conroy’s belligerence spectrum auction (red undies), threats ti withhold spectrum from Telstra if they proceed with hfc upgrade, threats to legislate against so called “hate media” (mediathat disagreed with his govt).

            A single example.

            NBNCo is the corporate realisation of the NBN policy (both govt). Policy and corp performance identical.

          • Come on Richard.

            We both know Conroy (or anyone else at the time, wouldn’t matter which minister it was) needed a big-arse stick & carrot for Telstra.

            They were never, ever going to just roll over. No incumbent does. Why would they? There is a reason any such company that has been separated, has required force.

            If we were going to spend money on acquiring the network, rather than setting up yet another entity, splitting Telstra and making the wholesale & networks side the equivalent of NBNco would have followed the same models used elsewhere.

            We didn’t. Situation was so ludicrous, the Government was pretty much able to institute a policy, because it could.

            NBNco isn’t a policy. It’s a government owned entity. If you are going to argue this, for the love of god, man, refer to the policy and legislation. :)

            I have repeatedly pointed out policy failures; just because when one looks at the evidence and questions the value of reverting a fibre rollout to a mixed model cluster-fuck, doesn’t automatically make one a fan boy.

            Questioning the status quo, isn’t unhealthy. Blaming the other guy to explain why the current guy doesn’t have to do a better job, is just silliness.

            The policy was flawed. They always are. The point here is that we are continuing to see a cluster-fuck of mixed technologies, a network that has lost value and a market that is increasingly hostile and taking matters into it’s own hands.

            Turnbull has steadfastly ignored and verballed anyone who chooses to question the financial and network value of MTM; it’s laughable to suggest he’s any less belligerent.

            It’s now a closed shop; we do not know what FTTN will deliver; we do not know if vectoring is used, we do not know how much of the CAN will be rebuilt. This is insane by the way; no sane person would consider rebuilding large chunks of the copper network and also expect that to be financially viable long term strategy.

            FTTN is a solution looking for a problem that didn’t exist. It didn’t exist because Telstra decided it didn’t. After lobbying both sides of the house (and failing) it chose to not bother; FTTN is built by incumbents looking to increase the longevity (and thus profitability) of an existing investment – copper.

            It’s not used by anyone building a new network. Turnbull has, none the less, stubbornly decided that in order to do this, NBNco had to actually buy the network, in order to then do what Telstra decided wasn’t actually financially viable, without massive regulation changes.

            Nobody has learnt a damn thing. I’m sorry mate, but to suggest Turnbull isn’t at least equally arrogant and stubborn; after making such drastic changes and steadfastly maintaining a vision that is in stark contrast to his own reports, is a bit much to swallow. :)

          • @brendon

            Actually we bith don’t know. Conroy’s answer to everything was his way, imo a terrible negotiator. He thought he could build a telco, he couldn’t. When failures pointed out by a few in the media he proposed legislation to restrict them. I’m not a Turnbull fan, but equivalence here is bizarre.

            Conroy’s and NBNCo failures are constainty overlooked.

            NBN was Conroy’s policy, NBNCo its manifestation; satellite, fix wireless, fibre, transit network, $13+b taxpayer equity. What’s outside?

            What evidence? Where’s your costing MTM vs FTTH? Fanboys state FTTH cheaper without any evidence.

            Silliness is believing Quileys on time and budget when all empirical evidence was it wasn’t. Fanboys are still using his early CP figures. Silliness is believing issues like mdu only became an issue after the election.

        • “Absolute misrepresentation of their actual performance. ”
          You’re right! After the revelations of Project Fox and the Melton trials etc (that the Liberal government tried to keep hidden) it was revealed the cost per premises would have been ~a third less again!

  3. Thanks MTM for a repeat of the 1990’s and the wasted capital through unnecessary overbuild.

    I feel sorry the consumer…


    • +1

      In the end we all pay for the triplication. (I’ve never used that word before) whereas we could have just paid for FTTP once.

      TPG said they wouldn’t go where there was NBN fibre. Presumably because they couldn’t compete with the service offer.

      • Multiplication not finished yet.
        Long term we all need FttP (eHealth, remote education, remote work/jobs, teleconferences, IoT, BigData/Science, 4K/360° VR, entertainment, new opportunities…)

      • TPG couldn’t go where there is NBN fibre.. because Telstra’s deal with NBN will disconnect the copper permanently.

        For the very few buildings which has both copper and NBN fibre, I’m sure TPG would be willing to put in FTTB if they have existing fibre backhaul nearby.

  4. FTTB! seriously, why roll out a “me too” service Vocus, show some guts and roll out FTTP to MDU’s!

    • FTTP is a massive governance issue with respect to multiple dwelling units due to the last mile living partly within private, developer or co-op/ strata titled property.

      This is why NBNco initially couldn’t go near MDUs. Well, they could get to the outer marker; but the inside was always the problem.

      FTTB was at least a solution that allowed for an easier win to ensure people had access some time this side of the heat-death of the universe. It’s currently considered the least complicated approach as it can leverage existing copper pairs that terminate at a (typically) central location, rather than requiring group-up fibre runs.

        • The technical aspect of deploying FTTH with respect to MDUs wasn’t ever (and still isn’t) the problem.

          Politics, legislation, responsibility and access, are.

          • @Richard, telecoms law provides the required access, NBN’s difficulty was getting hold of the body corps etc and that doesnt magically change by selecting an obsolete technology!

  5. does NBN have FTTB rollouts? I new about TPG, and heard of some random other which I assume was open networks but must have missed the FTTB announcements.

    imho its probably too late for Vocus unless they nail the installation and rollout so that its so simple for folks to do and understand. They can probably start in west and work toward middle (caus you know TPG’s consuming the east and working the other way) as they have a bigger western presence but

    • yup but in the one area that the tech doesn’t handle it well (say hello to cross talk kiddies)!

  6. Turnbull is getting what he wanted in opposition. He harpef on and on about infrastructure competition. Funny that he isn’t keen on it now that he has to balance the books. Maybe he could sell the NBN satellites to cover the increasing holes in the mtm. We don’t need those right! Lol.
    It seems there hasn’t been a day go by since Turnbull became minister that the stupidity of his decisions haven’t been highlighted, and sadly they get worse and more expensive sive as we go along.

      • Very different because they’re entirely different situations. BT owned a network they could upgrade, NBN Co had to deal with a belligerent Telstra.

        If only the LNP had split Telstra before selling it, you might be able to compare the situations. Apples and Oranges comes to mind.

        • Agree R0ninX3ph. If only Howard had any vision/clue. He was lucky, but we were not.
          NBN had to be built before the sale, or sell only the retail part & keep the network part (what is now NBN Co). Now Telstra is too big monopoly to deal with. The net effect of the sale is negative for Australia. And getting worse…until we become more proactive.

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