NBN Co and Telstra negotiating new agreement for copper access

NBN Co and Telstra negotiating new agreement for copper access

NBN Co records $715 million operating loss in half yearly results

NBN Co is negotiating a collaborative agreement with Telstra to access its copper network for Fibre-to-the-Node trials in NSW and Victoria.

The agreement, which will fall outside the terms of the $11.2 billion deal signed in 2012, between the two companies, will also include provision for a Fibre-to-the-Building pilot to test the roll-out VDSL broadband to end users in ten apartment complexes and office blocks in Carlton, Brunswick and Parkville in Melbourne.

It forms part of a series of programs that will help NBN Co incorporate a broader mix of advanced broadband technologies into the NBN and move the rollout to scale, according to an NBN Co statement.

The company confirmed that it had commenced negotiations with Telstra Corporation Limited on potential changes to the current agreements.

It has also begun preliminary discussions with Optus around the some of the findings of the Strategic Review.

In addition, it is undertaking Fibre to the Building (FTTB) pilot and Fibre to the Node (FTTN) trials to assist with the smooth transition to a new architecture subsequent to Commonwealth and regulatory approvals.

The FTTN trials will be run at Umina near Woy Woy on the NSW Central Coast and Epping in Melbourne’s northern suburbs.

The company will construct two small scale Copper Serving Area Modules, erecting kerbside node cabinets which will connect [NBN fibre] to spare copper pairs in the Telstra pillar.

Neither site had been earmarked to receive FTTP within the next 12 months under the previous rollout plan

Once active, NBN Co will invite RSPs to participate in a Fibre-to-the-Node end user trial.

This limited term trial will test the delivery of high speed broadband via FTTN to up to 100 premises at each location.

The company has also established a transformation management office to deliver the roadmap to the new NBN and ensure the workforce has the right mix of skills and experience to undertake the task.

NBN Co anticipates it will be in a position to begin the transition to the Optimised Multi-Technology Mix as set out in the Strategic Review from calendar 2015.

A spokesperson for NBN Co said the company was determined to stabilise and improve the efficiency of the rollout, and to help provide ongoing certainty for the Australian construction industry.

“As a consequence, the existing Fibre to the Premises (FTTP) rollout in the fixed-line footprint will continue throughout calendar 2014,” he said.

Accordingly construction orders continue to be issued and FTTP deployment continues to areas in line with the company’s current guidance for FY14, on top of the 351,046 premises already passed by fibre as at 31 December 2013.

A more detailed framework for the transition will be set out in the NBN Co Corporate Plan, which is due to be submitted to the Commonwealth later this year.

First half results

The news coincides with the release of the company’s first half result for FY2014.

The company recorded a $715 million operating loss after generating $47.8 million in revenue for the six months to 31 December 2013.

Total revenue rose by $18.4 million against the comparable period, with telecommunications revenue coming from a growing end-user base being the main driver.

Telecommunications revenue rose fourfold to $21.8 million.

Revenue generated from the 130,759 premises with an active NBN service across all access technologies (30 June 2013: 70,100) provided an average revenue per user figure of $36.50 a month (30 June 2013: $37.33).

Capital expenditure rose $396 million to $1.19 billion, in line with the continued expansion of the network.

The ongoing network rollout also drove an increase in operating expenditure, up $167 million to $500.4 million.

Employee-related expenses increased by 23 per cent to $189 million, driven by a 32 per cent increase in headcount from 2,235 over the corresponding period to 2,949.

An estimated 3450 external workers were actively working on the construction of the NBN.

NBN Co Executive Chairman, Dr Ziggy Switkowski, said the national rollout of the NBN was still only three per cent complete after nearly five years.

“Today’s results, while showing incremental progress, are indicative of the complexities inherent in the original approach,” he said.

“A revised NBN rollout that enables people access to high speed broadband sooner will both reduce costs and bring forward revenues.

He said a more rapid accumulation of revenues would also help fund the already-reduced construction costs and thereby reduce the debt requirements to build the NBN.

“I am pleased with the steps underway to deliver a faster and more cost-effective NBN, including the commencement of negotiations with Telstra and preliminary discussions with Optus as well as the technology trials and pilot we are undertaking.”

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Tags Malcolm TurnbullTelstraoptusDr Ziggy SwitkowskiNBN Co Executive ChairmanFTTN trialswoy woyumina


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