Biggest 2 Australian telcos join broadband rollout

June 23, 2011 By ROD McGUIRK , Associated Press

(AP) -- Australia's two largest telecommunications companies signed lucrative deals with the government to join the rollout of a fiber optic national broadband network that will be among the world's fastest.

Telstra Corp. and Optus Pty. Ltd. - which combined represent 60 percent of Australia's retail , signed separate deals with the government Thursday to close down their own infrastructures and transfer customers to the national broadband network, known as the NBN.

The deal with Telstra, the larger company, was required under the NBN business plan to achieve the rollout at 36 billion Australian dollars ($38 billion).

Without it, NBN Co., the government-owned company that is building the super-fast network, would have had to duplicate Telstra's unrivaled infrastructure.

But the deal with Optus, a subsidiary of Singapore Telecommunications Ltd., is an added bonus that will boost customers and drive down costs, Treasurer Wayne Swan said.

"Two major telcos have now signed on with the NBN and that will mean a very strong take up of the NBN," Swan told reporters. "This will, of course, completely change the market structure in Australia."

Both deals need the approval of Australia's , the Australian Competition and Consumer Commission. Telstra also needs the approval of shareholders at an Oct. 18 annual meeting.

Telstra, a former government-owned monopoly that still owns the nation's aging , which it leases to competitors, has agreed to progressively disconnect that infrastructure.

Telstra and the government expect the agreement to deliver AU$11 billion to Telstra over decades in replacement revenue through disconnection payments, and new revenues through payments for access to its infrastructure.

Telstra services will migrate to the NBN over its expected 10-year construction.

Telstra will also provide NBN Co. with access to other infrastructure for a period of 35 to 40 years.

Optus will progressively migrate its hybrid fiber coaxial cable (HFC) customers to the NBN starting in 2014, for which it will earn AU$800 million.

The government has already begun rolling out the network, which will deliver broadband speeds of 100 megabits per second to 90 percent of Australian homes, schools and businesses through fiber-optic cables connected directly to buildings.

The new speeds are 100 times faster than most Australians currently get - enough to watch multiple high-quality downloads of movies or television shows at once from the same connection.

A handful of countries - South Korea, Japan, France and Germany among then - currently have comparable speeds.

The plan to make Australians one of the most wired people in the world with uniform Internet access is made more challenging by the vast and scarcely populated Outback, which separates the major coastal cities.

The conservative opposition argues the plan is too expensive.

The opposition Liberal Party went to elections in August last year promising to deliver a smaller, slower - but much less expensive - AU$6 billion network with a range of technologies, including optical fiber, wireless and DSL.

Explore further: Telstra strikes $10B deal for Australia broadband


Related Stories

Telstra strikes $10B deal for Australia broadband

June 20, 2010

(AP) -- The government and Australia's largest telecommunications company announced a deal Sunday that clears a major hurdle to Prime Minister Kevin Rudd's plans for a superfast national broadband network.

Australia announces $30 bln broadband plan

April 7, 2009

Australia announced plans to build a 30 billion US dollar broadband network, its biggest infrastructure project ever, opting to retain government control rather than contract out the deal.

Recommended for you

Click beetles inspire design of self-righting robots

September 25, 2017

Robots perform many tasks that humans can't or don't want to perform, getting around on intricately designed wheels and limbs. If they tip over, however, they are rendered almost useless. A team of University of Illinois ...

New technique spots warning signs of extreme events

September 22, 2017

Many extreme events—from a rogue wave that rises up from calm waters, to an instability inside a gas turbine, to the sudden extinction of a previously hardy wildlife species—seem to occur without warning. It's often impossible ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.