If the National Broadband Network (NBN) adopts a fibre-to-the-node (FTTN) model it could be “advantageous to Telstra”, according to the telco’s CEO, David Thodey.
Shadow Communications Minister, Malcolm Turnbull, has repeatedly expounded the benefits of an FTTN broadband network as opposed to an FTTP one as it would cost less and can be rolled out faster.
He echoed this thought at the Communications Day Summit in Sydney on Wednesday.
Labor initially deemed fibre-to-the-premise (FTTP) the more cost-effective option, since FTTN would require paying Telstra vast sums of money to access its last mile copper infrastructure. NBN Co subsequently struck an $11 billion deal with the telco to shut down its copper network and migrate customers onto the NBN.
Thodey now claims the NBN Co’s payment to the telco would likely be relatively unchanged.
“Just because you have a node at the end of the street it’s still a migration from copper to fibre, so we still get those payments,” he said at an investors briefing in Sydney. “Really, the payment received is no different.”
If the Government decided to move forward with a FTTN network rollout instead, it would actually be beneficial to Telstra, according to the telco’s CEO.
“The bigger thing is if it was accelerated [through FTTN], which is what I think [Turnbull] raised yesterday morning, there is a different cashflow, so it actually could be seen as advantageous to Telstra.”
Essentially, the faster the NBN is rolled out the faster Telstra would receive the money promised to the company through the $11 billion.
Thodey clarified he does not mean to say the Government made a bad call in deploying FTTP, just that the situation is very different from when NBN Co and Telstra first discussed their $11 billion contract.
“Remember we now have a very different regulatory regime, a different legislation passed from when those discussions were had so the starting point is fundamentally different,” he said. “We have a contract with NBN Co based on FTTP and if it wants to go to FTTN we will look at that in terms of creating shareholder value.
“That is the starting point, not the starting point before that.”
While Thodey acknowledged a FTTN NBN could result in a faster rollout and a quicker cashflow to Telstra, it is all subject to negotiations with NBN Co should they decide to go down that route.
“However, I don’t know what additional cost I would incur or what other trade [offs] there would be,” he said.