NBN Co to buy Telstra and Optus cables

NBN Co to buy Telstra and Optus cables

Purchase will facilitate faster rollout of National Broadband Network

NBN Co chief executive, Bill Morrow

NBN Co chief executive, Bill Morrow

The NBN Co is set to acquire portions of the of the Telstra and Optus hybrid fibre coaxial (HFC) cable network in an attempt to speed up rollout of the National Broadband Network (NBN).

The deals will also see NBN Co acquire aspects of Telstra's copper network. NBN Co said its December 2013 strategic review estimated that the move to a multi-technology mix NBN will enable the network to be built at the least cost to taxpayers and be completed at least four years sooner than under the previous fibre-to-the-premises plan.

NBN Co said the agreement will see it progressively take ownership of elements of Telstra and Optus’ network in parts of the country where it represents the fastest, most cost effective way to deliver fast broadband.

Original definitive agreements between NBN Co and Telstra from June 2011, gave NBN Co access to certain Telstra assets such as ducts, pits and exchanges to use in the rollout the NBN, but not access to Telstra’s copper or HFC assets.

NBN Co also renegotiated the original June 2011 deal with SingTel Optus. Parties had originally agreed to the progressive migration of Optus subscribers to the NBN and the eventual decommissioning of the Optus HFC network.

Optus said it will continue to supply services to customers using its HFC network in areas where the NBN is still to be built or customers have yet to be migrated. Customers will be progressively migrated to the NBN once NBN Co has integrated Optus’ HFC network into the NBN.

NBN Co CEO, Bill Morrow, welcomed the deal saying it will bring down the overall cost of building the NBN and enable the organisation to complete the rollout much earlier than originally anticipated with less disruption to residents and communities.

“What’s more, making use of technologies such as HFC – rather than decommissioning them – enables Australia to capitalise on the significant investments being made globally in broadband technology.

“In short, this transaction is an essential step to spur Australia’s greater participation in the digital economy and help close the digital divide.”

Read more: EXCLUSIVE: Ingram Micro steps up mobility services play

Optus Chief Executive Officer, Allen Lew, said the firm has been a vocal advocate for fixed line competition for many years.

"The NBN offers the potential to provide more choice and competition for all Australians and puts us a step closer to creating a level playing field in Australia’s retail broadband market. Anything that speeds up the rollout of the NBN and increases the size of the contestable national broadband market is good for innovation and competition.”

NBN Co said the progressive transfer of HFC and copper assets to NBN Co involves no additional overall cost to the taxpayer.

The changes to the agreements are subject to a number of conditions including approval by the ACCC of a revised migration plan and rulings by the Australian Taxation Office.

Construction of the NBN is set to have commenced or be complete for around 3.3 million Australian homes and businesses by June 2016. NBN CO said over 309,000 premises across Australia are connected to the NBN today.

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