Telecommunications company, Telstra (ASX:TLS), and national broadband provider, nbn, have signed a Memorandum of Understanding (MoU) to negotiate a significant contract for Telstra to support the nbn network build in areas currently covered by Telstra’s Hybrid Fibre Co-axial (HFC) footprint as well as additional work for Telstra under nbn’s maintenance contracts.
Under the MoU, Telstra and nbn will negotiate to finalise a contract covering the design, engineering, procurement and construction management of the network in the HFC footprint covered by the existing Telstra HFC network. This contract is expected to be completed early in 2016.
It also includes an agreement for Telstra to undertake some early works to support the build of the nbn network in the HFC footprint while the contract is negotiated. This will include preparing Telstra nbn exchange locations and HFC planning and design work.
Telstra CEO, Andrew Penn, said the partnership is the result of the strong working relationship between Telstra and nbn.
“I am delighted that we have an opportunity to support nbn by leveraging Telstra’s knowledge and experience in network design and construction management, as well as continued maintenance. We have said all along that we are committed to providing whatever commercial services nbn needs to meet its business objectives.
“We have already engaged in work with nbn such as the successful 1000-node trial including FTTN node design and construction and further design work under nbn Planning and Design Services Agreement. We look forward to working with nbn to finalise the MOU and help bring the NBN network to millions of HFC customers,” he said.
nbn is continuing discussions with Optus about work for the future nbn HFC network currently passed solely by the existing Optus HFC network. A trial continues on the Optus HFC network in Redcliffe, Queensland.
nbn said these arrangements will have no impact on nbn’s peak funding estimate.
Telstra has also been awarded work under two new contracts as one of the network operations and maintenance services providers to nbn, with work anticipated to start in early 2016.
These two contracts have an estimated combined first year revenue of about $80 million, subject to the volume of work. The first contract is the provision of ‘operate and maintain’ services for the fixed line technologies as activations accelerate across the country.
In addition to Telstra, Operate and Maintain Master Agreements (OMMA) have been inked with Service Stream (ASX:SSM), and BSA (ASX:BSA) have also been awarded Operate and Maintain Master Agreements.
To further leverage Australia's industry expertise and help simplify the process of upgrading and transitioning the ownership of the two HFC networks, nbn has been discussing a shared management approach with both Telstra and Optus for their respective networks.
nbn has entered into an MoU with Telstra, whereby a way forward is being negotiated early 2016 for the design and construction management of the nbn HFC footprint currently passed by the existing Telstra HFC network.
Discussions with Optus are ongoing with a similar objective.
nbn CEO, Bill Morrow, said the nbn team is gearing for the next stage of exponential growth, building on the now 1.7 million premises ready for service and the 700,000 homes and businesses that are actively using the network.
“We’re now tracking over 10,000 new activations a week. By the end of this financial year we’re on track for nearly one in four homes to be able to order an nbn service and by June of 2018 this is set to grow to three in four.
“To optimise the network build and provide access to an excellent service for Australians, united partnerships with the construction and telecommunications industry are a key priority. This year, we have re-set our relationships with the industry by improving the way we collaborate and structure competitive, flexible agreements with our partners,” he said.
An additional agreement for Telstra legacy customers has also been made, relating to activations and assurance work during the 18 month disconnection window in areas that have been declared RFS.