NBN Co to pay Telstra to fix its own copper network


news The NBN company today announced it had signed or was working on deals with Telstra and Optus that would see the pair continue to fix, maintain and operate the legacy copper and HFC cable networks which they have already sold to the NBN company.

Under the previous Labor Government, the NBN company had signed deals with Telstra and Optus that were to have seen the two telcos shut down their copper and HFC cable networks as they were progressively replaced by the NBN company’s technically superior Fibre to the Premises architecture.

However, as Communications Minister, Malcolm Turnbull changed the NBN company’s model to its current Multi-Technology Mix approach, which is seeing the networks upgraded and becoming part of the NBN.

In a statement issued this morning, the NBN company revealed it had signed a Memorandum of Understanding with Telstra which would see the telco undertake “design and construction management” for Telstra’s HFC network. The NBN company said discussions with Optus were ongoing, with a similar objective.

The NBN company said if the negotiations were finalised, Telstra would manage the design and upgrade of its own HFC network, which is estimated to total 34 percent of the total NBN network. Optus would do the same for the areas which are passed solely by the existing Optus HFC network. The NBN company said:

“The advantage of Telstra and Optus managing the build within their existing HFC network footprint is in simplifying the physical changeover to the NBN network during the co-existence period. Potential risks in complicated migrations could be significantly reduced or avoided if the legacy owner manages the transition to Ready for Service. NBN would retain strong oversight of its network which will be built according to the company’s specifications.”

Secondly, the NBN company has awarded three existing contractors — Telstra, Service Stream and BSA — separate agreements known as ‘Operate and Maintain Master Agreements’ or OMMAs, which will see the three companies provide ‘operate and maintain’ services on the NBN fixed-line networks using the FTTP, Fibre to the Node and Basement, and HFC cable networks.

“These works involve activating homes and businesses, along with ongoing maintenance to help ensure access to a reliable and fast broadband experience for all end users,” the NBN company said. “Work covered by the OMMA relates to operations and maintenance work once an area has been declared ‘ready for service’ (RFS) and end-users are able to order a connection.”

Telstra provided further detail in its own media release.

Separate to its contract to take over operation of much of its own HFC cable network, the telco said, it had also been awarded two other contracts as “one of the network operations and maintenance services providers to NBN”.

“These two contracts have an estimated combined first year revenue of approximately $80m subject to the volume of work,” Telstra said.

“The first contract over 3 years involves fixing faults on the copper network and undertaking a small number of new connections for services that are yet to transfer to the NBN.”

“This revenue is expected to decrease in alignment with the NBN network build. The second over 4 years relates to fixing faults and connecting new services on the NBN for the Fibre to the Node (FTTN), Fibre to the Premises (FTTP), Fibre to the Basement (FTTB) and HFC technologies in select areas once a customer has migrated to the NBN. This revenue is expected to grow in subsequent years in alignment with the NBN network build, subject to volume of work. Both contracts have the option for NBN to extend.”

In his company’s statement, NBN chief executive Bill Morrow said the NBN company was gearing for “the next stage of exponential growth, building on the now 1.7 million  premises ready for service and the 700,000 homes and businesses that are actively using the nbn™ network.”

“We’re now tracking over 10,000 new activations a week. By the end of this financial year we’re on track for nearly 1 in 4 homes to be able to order an nbn™ service and by June of 2018 this is set to grow to 3 in 4,” said Morrow.

“To optimise the network build and provide access to an excellent service for Australians, united partnerships with the construction and telecommunications industry are a key priority. This year we have re-set our relationships with the industry by improving the way we collaborate and structure competitive, flexible agreements with our partners.”

The full NBN statement can be found online.

Image credit: Telstra


  1. I mean really is there anything else to say but we saw this coming?
    Merry Christmas Telstra, has some money.
    I think I found the reason why technology change from FTTN to FTTH for councils is impossible, because nbn are paying Telstra to repair that copper and they wouldn’t want that copper being torn up and replaced with fibre

    • Yep, 11.2 Billion and not a dollar more …. oh wait, what about all those expensive copper upgrade and maintenance tasks NBN Co now has to pay Telstra & Optus to perform you say?

    • Not hard to believe Turnbull has stuffed up yet again is it?

      Who else would buy the copper and HFC off Telstra for a SECOND time, and not insist on a “warranty” period where Telstra would fix any faults found for (say) 2 years after handover for FREE.

      • He hasn’t stuffed up at all, this is all part of his plan to create an NBN driven gravy train comprising of upgrades and maintenance for his mates and their companies that will last for over 20 years while also rewarding all his Telstra shareholding mates who now all work for nbn.

        All this while keeping Murdoch happy by delaying and reducing the threat of OTT Video services like Netflix, Presto etc because of the 2 years of dicking about writing dodgy reports (which MT’s mates got paid handsomely to write) and generally doing SFA. For example the HFC areas wont start being built till 2017 at the earliest.

  2. And meanwhile every taxpayer paid for all Federal politicians to be connected to fibre to the premises internet in mid 2013. WE paid Telstra to do that while 80% of us get 1820’s technology i.e copper.

    Labor and Conroy made mistakes. But at least they were morally consistent – 93% of us were to get what politicians have got.

    • Here it is. The fucking idiot politician puppets of the oligarchs don’t care if they destroy Australia in the process of them staying rich. That is all. They don’t care if the Fiber means that they can sell more products to the rest of us. They don’t care about anything because they are secure that they own the state. They paid for it and political donation which are just legal bribes. These same folks managed the economy into the ground but are still rich. As long as they are the captain of the titanic. They don’t care.

      • Sadly all true…..even more depressing……it is Australia who voted them in…us……..collectively and it looks like it is going to happen again….

  3. A demonstration of the governments commitment to innovation.

    All the impending Aussie startups will be building their innovation castles on foundations of copper in disrepair. “Burned down, fell over, then sank into the swamp”.

  4. I’m impressed by the government’s dedication to innovation. Sure, they could just install fibre and be done with it, but that’d be easy. They want a challenge!

  5. Twas the week before Christmas,
    and all through-out the NBN,
    bad press trash was being released,
    too not a sound from main stream media,
    not even a mouse.

    • Rupert Murdoch: My Foxtel Empire is GLORIOUS! Clap! Clap! May my august rag proclaim my glory throughout the land!

  6. If this happened in the third world, we would be snickering behind our hands in a superior fashion.

  7. Take your money out of your pockets and bend over and grab your ankles, Telstra’s coming.

  8. Come on, this has got be a crime. Perhaps abuse of public office? “A Commonwealth public official is guilty of an offence if the official exercises any influence that the official has in the official’s capacity as a Commonwealth public official, or engages in any conduct in the exercise of the official’s duties as a Commonwealth public official, and the official does so with the intention of dishonestly obtaining a benefit for himself or herself or for another person, or dishonestly causing a detriment to another person.”

  9. Guys, I hate the FTTN and HFC components of the lnbn, but I actually think it would be retarded for any business other than Telstra and Optus maintain, or significantly modify this equipment.
    Fact is Those companies have the staff that have been maintaining this equipment in house.
    Hate the technology, but this is a good decision (given th context).

    • and that is why Telstra and Optus getting these contracts was always a forgone conclusion and why the “they gave us the networks for free” was always farcical.

      • I would absolutely agree with this sentiment. I didn’t want to imply otherwise. I do feel like even though we know these things, we should acknowledge the reality.

        The libs are so focused on the mantra that government should “not pick winners”, they are intentionally picking loser technology, and making really bad decisions as a result. This is just a conclusion of a really bad decision they made long ago.

    • Yeah – the decision to use/maintain/rebuild outdated technology was stupid, but subcontracting the organisations who are already familiar with that install to handle operations makes sense if you insist on going down that path.

    • Which everyone already saw/knew/expected.

      If your using legacy networks owned by another company they obviously would be the best ones to handle the maintenance.

      Of course the white elephant in the room that never gets asked is WHY DID WE PURCHASE SAID LEGACY NETWORKS?!

        • ‘Sell’? It wasn’t really sold. It was forcibly privatised. At a tremendous loss, compared with the cost of construction. More like ‘gifted’…

  10. According to Tony Brown, this does not include remediation, but only faults with ready for service premises.
    How does that work? Until they connect a premises they have no idea if it needs remediation or not. When is a fault, ie. rooted copper network, deemed to be a fault and not remediation?

    Does NBN(TM) pay for the first “fix” as remediation, then future work is fault work?

  11. Paying twice for something that will need replacement or upgrading in the near future. What a smart lot we have running this country and building its broadband network.

  12. Renai’s claim that Conroy’s $11+b deal to shutdown the HFC and copper networks is simply untrue. The deal was to migrate internet customers to the NBN and prohibit their owners using the HFC network to compete against the FTTH in areas deemed ready for services (ironically later to include service class zero premises). Copper in the fixed wireless areas was to continue (Conroy signing an unimaginable 20 yr USO extension with Telstra) and could actually compete with NBN products (funny given the technology advancements demonstrated by BT).

    We know from JK’s senate estimates link that Conroy was aware Telstra’s HFC network was contracted to Foxtel until at least 2023-25. I don’t know the details of Optus but presumably their subscription TV customers expected supply to continue.

    The existing HFC networks cover some 2.5-3m of the expect 3.6m customers. Build out was always required. Like FTTH NBNCo has sensibly chosen to outsource the design, construction and operations. Unlike the old management they’ve actually selected companies with extensive experience.

    Separate agreements have been signed to support other technology (FTTH,FTTN/B).

    FTTN requires copper remediation, already acknowledged.

    NBNCo statement claims no increase in peak funding, the cost therefore equal to or below existing budgets.

    With the original $11b one wonders what could have been achieved with a competent negotiator. An offer to upgrade the HFC networks for an open access wholesale offering would have cost maybe a billion. The three amigos were going to upgrade (not open access) for hundreds of millions until threatened by Conroy (restrictions to cellular spectrum).

    Much to like about the new management. The policy is a disaster but risk and cost to taxpayers significantly reduced.

    Renai et al a Merry Christmas and all the very best for 2016. I’ve a good feeling about it.

    • “Renai et al a Merry Christmas and all the very best for 2016. I’ve a good feeling about it.”

      We all have a good feeling about 2016 Richard… well after all why wouldn’t we, it’s the year we will all receive that step into the future, of 25mbps-50mbps for all Aussies and it will be cheaper and faster…

      Hmmm let’s now reconsider 2016 in actuality, as we would if we had two eyes shall we?

    • It’s always rather amusing when someone takes the time to make a rather verbose argument of “short term risk reduction” in relation to a “long term project”

      Anything can look good if you mess with scope and throw in lots of big words I guess

    • Or they could have just done what they intended. $11b+ to migrate them to Fibre.

      Telstra could then do whatever it wanted with the copper, as it would have remained their asset.

      And don’t bother coming back with your tripe about the FTTP rollout failing. You can’t prove that, your evidence doesn’t support it, and in fact current evidence shows that the original NBN was conservative in its profitability.

        • That “link” explains nothing. You are ranting about Quigley’s pdf which uses SR and CP16 figures.

          So how about you step back, and explain how CP 13 would have cost the huge expanses of money that you are identifying?

          • Nah woolfe he talks about tracking disastroudly and only link revune figures are down due to not hitting there rollout out targets. But being the ARPU is above what there where current expecting and blows apart the ARPU figures Turnbull was claiming before the election.

          • Provided both revenue and rollout predictions vs actuals. Clearly few here can comprehend them.

          • Yes Richard but we could do the same but your fanboy captian didn’t release any figures. Cough transparency cough.

            So with the roll out prediction for 10-12M premises by 2016 what was the expected revenue be? Oh wait how about the 4.5M premises by 2016 what was. Oh wait it’s now just 2.5M premises by 2016 what is the expected revenue be.

            It just shows you cherry picking figures to suit your narrative.

            A bit like your claim copper speeds improve over all lengths of copper. So at 2Km which is faster g.fast, VDSL or ADSL.

          • Richard, NBN have had to resort to cooking the books to make FTTP look bad so why would we believe their numbers anyway?

          • @jk I’m confused. Are you talking the destroyed coalition policy document? Another disaster!

            ARPU is marginally higher (though falling, CVC revenue higher due to predicted ramp UP of activations), however CPP under Quigley more than double ($5000), in peak rollout $3.7k (forecast $2.2k or lower). Take up well below required 75%.

            @DO then provide some figures of your own. Quigley’s pdf confirmed the CPP, revenue is public in their audited AR (still waiting for you to support your claim re audited CPs) as is the number of premises passed (published weekly inc sc0).

            I’m picking figures that directly address W’s claim their performance wasn’t a disaster. Peak funding has increase every CP. its’ other inability to comprehend the most basic data that causes much of the issues here.

          • That’s ok Richard, I’ll wait for the Royal commission into the liberals destruction of the NBN.

          • @ Richard…

            Thanks for the frank admission of confusion.

            After all IMO, anyone who not only thinks, but actually argues that this inferior mish-mash, FttN based roll out of obsolescence, those themselves rolling it out referred to as “fraudband” when it was at least somewhat current 8 years ago… built on the back of an already operational NBN forerunner… is actually doing well is indeed confused.

            Anyone who also dismisses the daily blunders or tries to hide the immense MTM cost and time frame blowouts unheard of until the “cheaper/faster – fraudband” network was around …again from a company who had all of the framework already in place for them, is indeed confused.

            Anyone who juggles multiple figures from multiple docs to suit their narrative and ignores other figures/docs entirely, is indeed confused…

            …and/or they have ulterior motives of course.

          • Yes Richard yes Quigley comfirmed the CPP but also confirmed that the SR CPP where also false.

          • @Richard
            “Provided both revenue and rollout predictions vs actuals. Clearly few here can comprehend them.”
            I cannot discern the “predictions” or “actuals” from your link. There is too much information confusing it. So can you provide just those details please.

            “ARPU is marginally higher (though falling, CVC revenue higher due to predicted ramp UP of activations)”
            ARPU is 11% higher than expected by (previous)NBN co and 53% higher than expected by the SR.
            That is not “marginally”, that is significantly higher.
            At the Point of time when NBN released the ARPU figures, the only elements it could earn a profit on where the elements of the previous Plan. This means not only were they profiting on the previous plan, but they were profiting more than expected.
            IF the ARPU is now falling, it will be directly attributable to the “new plan” elements coming into play. For example FTTN and HFC.
            Whether it falls or not however is not the point. The point is the original NBN plan was profiting at higher than expected levels.

          • Jason, what I find telling, to prove our friends complete disingenuousness and contradictory demeanour to suit the narrative, is the fact that he totally dismisses or discredits all of Quigley’s estimations…

            Oh, umm, except those that fit within his blinkered narrative (like above) which he strangely then strangely grasps with two hands and beats his chest to say there, look Quigley said…!

            I wonder if he can see the irony if not the hypocrisy of this?

            Very odd.

  13. Lurid headline, actual discussions, press release or disclosure to the ASX seems to be more about getting copper or HFC network ready for taking to FTTx (VDSL2 or G.Fast?) and DOCSIS3.x.
    Then again, hardly surprising given nbn from 2013, NBN from 2007, cancellation of Opel Networks of 2007, no to Telstra FTTN of 2005, … and so on?

  14. “Telstra and Optus that would see the pair continue to fix, maintain and operate…”

    Should that [perhaps read “commence fixing and maintaining”?? :p
    Proper maintenance has been abandoned for years, as has been well demonstrated, and confirmed with a simple 5minute conversation with any tech on the street (that’s the real world Malcolm, I’ve talked with them, have you?)

    Thought bubble, instead of NBN, why didn’t the powers that be simply reword the USO to upgrade the miserable data component. I know there was a data component to the USO, but it was dismal, around a poor fax connection requirement, 1440bit ref? ie it was covered by my landline’s Ram8 pair gain’s 28kbps dialup capability, insufficient and cancelled 10 years ago.

    Simply increase the requirement of the USO to be capable of supporting 25mbps data within 5years… There’s a Faster, Cheaper, Sooner option, Malcolm et al. you missed it!!! Legislating it would have cost a fraction of the “fully costed plan”
    Ultimatum to Telstra, Give Australia 25mbps within 5 years, or hand it over the tax payer funded copper & conduits you received under privatisation! There are numerous exchanges with insufficient adsl ports, or even none at all, that’s a reasonable first step, not FTTN, equivalent speeds to existing adsl & in already served areas…
    Now that would have been leadership, but would require a party with the best interests of Australia at heart, rather than the interest’s of mates with shares. Bring on the Royal Commission… which won’t imprison nearly enough politicians…

    I passed the NBN disillusion stage a year ago, bar the fortunate few who received fibre, it’s a dead cause and the vultures are squabbling over the carcass. 45km from Melbourne centre, 4k from exchange, I’ll get nothing, 10 pair can’t serve 15 dwellings over 2k dead end street (& hilly deadspots for 3g or wireless), end of story.

    • Don’t worry Richard claimed there was $B’s being invested into infrastructure before the NBN lol

    • @SBD, I think there was something called an Australian Broadband Guarantee till mid 2011, 512/ 128 Kbps and something like 3 GB of quota?
      Pretty sure NBN interim satellite wireless service replaced it with something like an advertised 6/ 1 Mbps.

  15. Richard/Alain/etc.,
    Seeing as you’re constantly outnumbered on here, perhaps your so-called “facts” are crap.

  16. “NBN Co to pay Telstra to fix its own copper network”

    Telstras copper network was purchased by NBN, and NBN has agreed to have Telstra contractors (who are already familiar with the state and problems of the copper network) be the repairers of said problems.

    A more accurate title would be- “NBN to pay Telstra contractors to fix its acquired copper network”

    I’m afraid this factually incorrect title is a reflection of Renais and Delimiters biases, wanting to stir trouble and rattle peoples emotions rather than report facts.

  17. And I suppose it’s also Renai’s and Delimiters “bias/stirring” implying and/or stating the same here too?



    Anyhoo, from my understanding Telstra are being paid extra to maintain the network(s) and to fix faults. Gee faults… you know that have been there for how long? Probably since the “previous owner overlooked and ignored them, because as Derek mentioned earlier, they knew Alan Bond was coming”…!

    Again all Renais and the Delimiter posters faults…


  18. And if Telstra had never of been sold off in the first place, we wouldn’t be in this mess right now!
    If they had started rolling out fibre back in 2000 or so, they’d probably have finished the entire country by now, and we’d have a proud nation with a future proof asset, and a world class broadband network.
    But no, we couldn’t have that now, could we?
    Gotta think short term and keep those shareholders happy!
    None of those awful profitable public infrastructure companies that employ hundreds of thousands of people, and train young people up for a future…. (what Telecom Australia used to be)

    • Neil back in 1995 Telstra had a plan to deliver fibre to all of Australia by the end of 2010 but then it got privatised

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