Primus Telecom has become the latest ISP to unveil plans for its own DSL network, following iiNet’s recent announcement that it would deploy independent infrastructure across Australia.
As part of a presentation on the Australian telecommunications industry to the American Chamber of Commerce, Primus Telecom general manager, Greg Wilson, said Primus would begin installing Digital Subscriber Line Access Multiplexers (DSLAMs) in 150 exchanges nationally over the next quarter. The telco intends to double this number in future, he said.
At present, Primus currently maintains DSLAMs in about 40 exchanges surrounding Australia’s major capital cities.
Wilson said the investment would allow Primus to provide ADSL services independently of Telstra.
“We do not wish to be totally reliant on the Telstra infrastructure,” he said.
The lack of service quality assurance across Telstra’s ADSL access network had also persuaded Primus to set up independent DSL facilities, he said.
Primus is one of many ISPs now investing in its own DSL network in a bid to break away from Telstra’s wholesale division.
Earlier this month, iiNet announced it would spend $2.3 million to deploy 32 DSLAMs into Telstra exchanges across Australia. Competing ISPs, including Internode and Netspace, have also begun rolling out similar infrastructure.
Commenting on the state of broadband competition in Australia, Wilson said many ISPs had been forced to cut profit margins in a bid to match the telco giant’s anti-competitive ADSL retail pricing.
“With their customer base under severe attack from Telstra, the rest of the industry was forced to match Telstra’s retail rates, even though it meant incurring a loss,” he said.
“What is certain is that many smaller ISPs will disappear from the Australian market because they will not be able to compete. Margins for other ISPs such as iPrimus will be extremely tight.
“So much for effective competition in broadband,” he said.
Wilson voiced support for the ACCC’s investigation into Telstra Wholesale’s anti-competitive behaviour.
He also called for the separation of Telstra’s wholesale and retail divisions as a means of levelling the playing field between the telco and smaller ISPs.
“It is critical for the health of the Australian broadband landscape that the price for the Telstra ADSL wholesale service is set low enough that small-scale vendors can remain,” he said.