NBN flame wars continue over 'cosy' deal, Optus' suitability to build

Telstra has continued fuelling the NBN flame wars this week as it threw down a challenge to SingTel Optus in the wake of AAPT’s departure from Terria and Optus CEO Paul O’Sullivan’s comments that his company won’t invest in fixed line services if the government does a “cosy” deal with Telstra for the NBN build.

O’Sullivan, whose company is the largest member of the Terria group, called Telstra’s open access model a “sham” this week, claiming Australians will pay much higher prices for broadband under a Telstra operated NBN.

“If the government simply does a cosy deal with Telstra, and fixed line competition suffers in the process, then we will look for more attractive places to put our capital. So, no doubt, will many other potential investors,” he said.

Telstra called O’Sullivan’s comments an empty threat and an attempt to bully the government “because SingTel Optus stopped seriously investing in Australia years ago,” it said in a statement.

Accusing Optus of pulling investment in its HFC network to piggyback off Telstra’s copper network, ceasing investment in fixed services in regional Australia, failing to secure funding for OPEL because of coverage issues and “chronically” under-investing in its 3G network, Telstra questioned SingTel’s commitment to funding a Terria NBN bid.

“My challenge to the SingTel Optus chief executive is put your money where your mouth is today or step aside and let someone else get on with the job of building this network,” said Telstra’s GM of public policy and communications, David Quilty.

"If it was serious, SingTel Optus, whose parent is majority owned by the Singapore Government's sovereign wealth fund, could put an end to this farce today by making the necessary financial commitment to building the National Broadband Network. Australian taxpayers should not be forced to bear an unacceptable level of financial risk while the lead member of the Terria consortium, which is majority foreign government owned, puts the absolute minimum of its own money into the project."

But while Telstra is no stranger to dishing out ultimatums to the government – the incumbent has made it clear it wont invest in the NBN if structural separation is enforced – one telco analyst not shy of criticising Telstra’s monopoly hold over Australia’s telecommunications infrastructure said even before AAPT pulled out of Terria that the NBN wont happen without Telstra.

Paul Budde, of BuddeComm, said at a roundtable event in Sydney two weeks ago that he unequivocally believed the NBN cannot be built without Telstra.

“There’s no way of bypassing Telstra, and by pretending we can bypass Telstra we again put in delays, delays and more delays. By pretending Terria will be able to roll out something magically that will bypass Telstra is totally impossible,” Budde said.

“Telstra is quite right, they are in fact the only one who can deploy and do it. I believe Telstra already has a very significant FttN network in place, they have invested $12 billion over the last few years…there’s no way Terria can compete with that situation,” he said.

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