NBN network.

[Dave]

NBN Co to buy Telstra network for $11 billion
By Brett Winterford

Jun 20, 2010 2:05 PM
Tags: nbn co | national broadband network | telstra | sale | 11 billion | lte | copper | cable
NBN Co and Telstra sign historic agreement.
Telecommunications incumbent Telstra has agreed to migrate its copper and cable broadband networks to Government-owned NBN Co in a deal worth $11 billion.

The two parties have signed a financial heads of agreement, announced Sunday, that will provide NBN Co with access to Telstra's passive infrastructure (pits, ducts and backhaul fibre) and eliminate Telstra as a fixed-line wholesale competitor to the Government-owned entity.

Telstra, in turn, has been given assurance from Prime Minister Kevin Rudd that it can compete in auctions for 4G [LTE] mobile spectrum and face less regulation from the Federal Government.

The deal would need to be approved by both Telstra shareholders, the Federal Parliament and competition watchdog the ACCC.

The assets to be transferred as part of the deal were valued at $9 billion, whilst Telstra values the financial gain from "public policy reforms" signed as part of the agreement at $2 billion.

The $9 billion will be paid progressively as Telstra's copper network service is decommissioned and cable broadband network service deactivated. NBN Co will pay Telstra a fee for every customer migrated from these networks onto NBN Co's fibre network (upon which the figure of $9 billion was assumed).

"Telstra has received written confirmation from the Prime Minister that Telstra would be able to bid for Long Term Evolution (LTE) wireless spectrum should the transaction be completed and that sufficient regulatory certainty will be provided on a range of matters for NBN Co and Telstra to enable the transaction to proceed," the telco said in a statement.

Telstra will maintain its cable network exclusively for the purposes of its Pay TV joint venture, Foxtel.

USO changes

Should the deal go ahead, Telstra will no longer be required to meet most of its Universal Service Obligation costs.

The Federal Government plans to create a new entity called "USO Co" to ensure the needs of regional Australians continue to be served, which will take over the Universal Service Obligation from July 1, 2012.

USO Co will be provided $50 million of funding in 2012-13 and 2013-14, but will be granted $100 million per year in future years.

The Government indicated that the telecommunications industry may be required to also contribute to funding USO Co, "subject to industry and stakeholder consultation."

The Government will also provide Telstra $100 million for the "retraining and redeployment" of Telstra staff.

Further, the Government said NBN Co would be the "wholesale supplier of last resort" in Greenfield (new) housing estates from January 1, 2011.

More coverage:

- FAQ: Making sense of Telstra and NBN Co's agreement
- Telstra eyes astronomical pits and pipes lease
- Coalition vows to scrap $11bn Telstra-NBN deal

Barriers to overcome

Whilst describing the agreement as an "important step", Telstra chief executive David Thodey warned that there were significant conditions attached.

"A very significant amount of work must still be done on many complex issues," he said.

The two parties are yet to work out the finer details around "migration processes, taxation, the future of legacy regulations applying to Telstra and the consequences of any major changes to the NBN rollout schedule."

Further, the heads of agreement is conditional upon the Government passing legislation and the deal being approved by the Australian Competition and Consumer Commission (ACCC).

"Accordingly, there can be no guarantee at this time that the transaction will progress to completion," Telstra said in a statement.

NBN Co chief executive Mike Quigley described the deal as a "sound outcome" for the company charged with building a national fibre network.

"When finalised, it can maximise the use of existing infrastructure and accelerate the roll out of its network," he said.

"It also means Telstra is likely to become NBN Co's largest customer as it progressively migrates its voice and broadband traffic to NBN Co's wholesale-only, open-access network, providing greater certainty about future revenues."

Thoughts ?

Dave.

 

[Dave]

I was talking a Network Construction tech last night at a exchange who was telling me that free to air TV, Pay TV, Internet and your phone service are headed to go through your fibre line when its installed.

Anyone here thinking of installing TV antenna's ? If so Id look at another source of income.

Dave.

 

[Jason]

Hope my Telstra shares go up.

 

[nismo4x4]

lols ditto.

 

[KraftyPg]

There is still plenty of time for NBN to fail or fall off the radar, nothing will be finalised before March next year and even then it's not a definite according to my sources inside Telstra.

Apart from anything else even if it does get implemented by the time it gets fully rolled out to the areas that the government and telcos consider to be the majority of the population it will no longer be new technology and will need upgrading. It might be a step forward but it's not a very big step forward considering the time frame.

 

[rescue]

I remember back when I worked for Telstra they were just rolling out a trial of fibre direct to the home, mind you I left in 1995 so its good to see they are not rushing things....

 

[Matt - VNET Pro]

Some of you may or may not of heard of a new suburb being planned out in the Geelong, VIC area called Armstrong Creek. They have just started selling the 1st stage of the development which is set to house up to and around 20,000 new residents, about 12,000 new homes roughly over the next 6-8 years. This new suburb will only be run off Optic Fibre to your home.

No TV antennas or PayTV Satellite dishes are allowed to be installed what so ever. (Lots of other strict rules also, every home must have eaves & a portico, no roller doors only panel doors & no front fences just to name a few) The 1st stage is expected to have homes built on within the next 12-18 months, not leaving much time for Telstra to get their act together. So what happens, no fibre up & running for lets say 4 years & no copper cabling, no TV antennas and no satellite dishes, basically you could have no Telecommunications services at all for quite sometime !! ??

I am already in the Telecommunications industry, think I need to get into Fibre connections also as there may be some work out there for me in the very near future........?

 

[KraftyPg]

Nah go into training pigeons if all this great technology fails we need someone who can train carrier pigeons so we can still communicate, will be slower than our current electronic means but no doubt should still beat Australia Post.

 

[Dave]

Some of you may or may not of heard of a new suburb being planned out in the Geelong, VIC area called Armstrong Creek. They have just started selling the 1st stage of the development which is set to house up to and around 20,000 new residents, about 12,000 new homes roughly over the next 6-8 years. This new suburb will only be run off Optic Fibre to your home.

No TV antennas or PayTV Satellite dishes are allowed to be installed what so ever. (Lots of other strict rules also, every home must have eaves & a portico, no roller doors only panel doors & no front fences just to name a few) The 1st stage is expected to have homes built on within the next 12-18 months, not leaving much time for Telstra to get their act together. So what happens, no fibre up & running for lets say 4 years & no copper cabling, no TV antennas and no satellite dishes, basically you could have no Telecommunications services at all for quite sometime !! ??

I am already in the Telecommunications industry, think I need to get into Fibre connections also as there may be some work out there for me in the very near future........?

I was only thinking the other day about doing fibre splicing training, been thinking of getting a few other tickets aswell like a excavator and bobcat.

The biggest money in it is the splicing equipment.

Dave.

 

[Jason]

Fibre optics will not become old technology anytime soon. 14 TB/s over a distance of 160k's would be nice, don''t know how long my cap would last :/ It's been around since the 70's.

 

[Matt - VNET Pro]

Not exactly sure how the fibre to your home will work exactly, not sure how they do it in other countries. Is there a fibre junction box externally with a powered media converter or do they just junction it to fibre internally to one location then convert back to copper internally??

 

[Dave]

Not sure Matt. I think they will fibre to inside and then back to copper after that.

When I was talking to that Network Construction guy the other day he was telling me Telstra just upgraded fibre's between Kent St and Brisbane which is now capable of 400Gb/Sec.

Dave.

 

[Leprechaun]

No TV antennas or PayTV Satellite dishes are allowed to be installed what so ever. (Lots of other strict rules also, every home must have eaves & a portico, no roller doors only panel doors & no front fences just to name a few)

I hope they drive a Moskvitch. Communism comes to the burbs!

They will probably have to name their first born son Marx too. God this country going to shit.

 

[Jason]

Apparently the fibre optic cable will enter the home. It will have an optical network terminal installed, I think it has an 8P8C RJ45 connector rated at cat6 only for phone/internet and an f type connector for pay/fta tv. The terminal also needs power.

 

[Matt - VNET Pro]

Ok well I'm guessing not matter which way they do it the end work will be contracted/tendered out to large 3rd party companys who then hire cheap 3rd party contractors like myself I would assume......be interesting to see exactly how long this all takes.....

 

[Dave]

Hey Matt have you done any fibre splicing ?

That Network Construction guy was saying Telstra pay $120 a splice.

Dave.

 

[gshannon]

Apparently the fibre optic cable will enter the home. It will have an optical network terminal installed, I think it has an 8P8C RJ45 connector rated at cat6 only for phone/internet and an f type connector for pay/fta tv. The terminal also needs power.

Pretty much bang on the mark there Jason. I have been doing FTTP installs into approx 8 suburbs in Perth for the past two years. I am a pre provisioning contractor for Service Stream and Vision Stream and have been doing copper installs for years, this is just the next stage and one which I am very happy to already have a part to play in it.

Telstra have been pushing there Velocity (FTTP) package into new estates for quite a few years now, this is exactly the same technology that the NBN will be using. From July 1st this year it is a requirement that every new estate have FTTP infrastructure installed

Here is a map that shows the existing communities already using FTTP
Australian FTTH News: FTTH Communities Map

 

[Dave]

In that case I am going to do a fibre course soon.

Dave.

 

[gshannon]

If you want to get into FTTP there are more specific courses avail
Celemetrix Australia - FTTX Courses

Start up costs are pretty steep. Even with all the gear that I already had doing copper installs, I had to outlay another 6k for testing equipment

 

[Dave]

Cheers mate, will look into it.

Dave.