Telstra-NBN Co deal opens up 6m kms of fibre

NBN Co could gain access to 6 million kilometres worth of Telstra's fibre networks as part of the $11 billion Financial Heads of Agreement deal between the National Broadban Network (NBN) wholesaler and the telco.

As part of the non-binding agreement, currently subject to approval by Telstra shareholders and the Australian Competition and Consumer Commission, NBN Co would gain access to existing Telstra infrastructure for construction of the national, fibre-to-the-home network. It would also gain the right to acquire Telstra backhaul services and space in the telco's exchanges.

Though traditionally silent on the extent of its fibre network, a spokesperson for Telstra told Computerworld Australia that it already had 6 million kilometres worth of individual fibre strands in Australia, amounting to about 200,000 kilometres of fibre routes with multiple fibres for increased capacity.

Estimates that the telco has between 110,000 and 140,000 kilometres of ducts around the country means that, while some of the fibre could have been installed overhead, much of it would be in the ground.

While often referred to as Telstra's "dark fibre" network, much of it is already lit up and active, but reserved purely for the telco's own use and backhaul between exchanges and key aggregation points.

Telco analyst, Richard Chirgwin, said NBN Co could presumably take up the right to acquire some of Telstra's extensive fibre network, but would largely rely on competitive bids where possible.

"Telstra's fibre comes into play not in the NBN Co access network, but in the backhaul network," Chirgwin said.

"It's when you get away from metro when you very quickly concentrate down to Telstra and only Telstra."

Telstra' inter-exchange fibre in metropolitan areas could also become a part of the NBN, but in areas where competing fibre suppliers exist, a tender process for either fibre supply or construction using Telstra ducts would largely take precedence.

AAPT chief executive officer, Paul Broad, recently revealed the ISP had 24 strands of fibre in Sydney, Melbourne and Brisbane, but was currently occupying only three of those.

Chief executive officer, David Thodey, and chief financial officer, John Stanhope, said in a media and analyst briefing that the telco had modelled assumed pricing for access to both backhaul and the NBN as part of the Financial Heads of Agreement deal.

Chirgwin said there was a possibility that, even in regional areas where Telstra is the only fibre supplier, NBN Co may choose to build its own fibre ducts due to a lower cost per kilometre relative to metropolitan areas.

Should this occur, Stanhope said Telstra would be willing to tender for construction.

"Of course we have told NBN Co that we remain available to construct if they so desire... if they tender out construction we will be an interested party," Stanhope said.

While some media reports have placed a term on the lease of Telstra infrastructure by NBN Co, both parties to the agreement remain silent on the duration of the agreement.

Copyright © 2010 IDG Communications, Inc.

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