M2 ponders direct connection to NBN

M2 Telecommunications may have struck up an alliance with Telstra Wholesale for the National Broadband Network (NBN) but it hasn’t ruled out a direct relationship with NBN Co.

The telco has become the first wholesale customer of the NBN through Telstra, connecting its first residential customer in Armidale, NSW, in the last 48 hours. Armidale is one of the five mainland trial sites for the NBN and M2 plans to sign up customers at the other locations in the coming weeks.

While the new wholesale arrangement is already underway, M2 managing director, Vaughan Bowen, said a direct link to the NBN is still on the cards.

“The trial with Telstra is exactly that; we’re working with the company to see how the aggregation partnership works,” he said. “We’re not running out connecting with NBN through a direct relationship in the future.”

The telco has already had lengthy talks with NBN Co about a direct connection but the time M2 will spend connecting customers through Telstra as an aggregator will provide the company to experience to weigh up both options.

Bowen said the telco remains open-minded but since the trial sites were already up and running it made sense to test out the aggregator route first.

Whether it’s a direct or indirect relationship with the NBN, either way it is going to cost M2 money. Going through a wholesale aggregator bumped up operational costs while going direct with NBN Co will require capital expenditure.

But Bowen noted aggregation does provide certain advantages.

“We’re first and foremost a sales, marketing and customer support company so Telstra’s established skills in network deployment do put it in a good position to connect to the 121 points-of-interconnect [PoIs] on the NBN,” he said. “We may also potentially have access to a wider suite of wholesale services along with apps and content services we can add onto the NBN access through Telstra.”

Ultimately, M2 seeks a solution that is operationally, commercially and strategically viable for the business.

It is not even eliminating the possibility of going with another NBN wholesale aggregator such as Optus or AAPT.

“The fact is this is a learning process for us to understand how services are delivered on the NBN in a technical and operational level,” Bowen said. “There is no deadline on when we will make our decisions and we might even end up with a hybrid of both, that is, some customers will be directly connected to the NBN and some will be through an aggregator.”

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