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.”
Image credit: Telstra