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Optus To Trade Fibre & Satellite For Access To Broadband Network

Optus To Trade Fibre & Satellite For Access To Broadband Network

Optus is proposing a “head-start” deal that could see it earning equity in the Rudd Government’s planned  and yet to be named ­ National Broadband Network company, in return for throwing in access to Optus’s existing fibre network in major cities, and perhaps its satellite transmissions for use in remote areas.

The No 2 telco’s director of government and corporate affairs, Maha Krishnapillai, confirmed this on ABC Radio last week. His comments came after Telstra chairman Donald McGauchie and CIO (and CEO hopeful) John Stanhope headed to Canberra for meetings with the Government on similar proposals.

“This is a brand new network that needs designing from the ground up,” said Krishnapillai. “We need to look at what elements (of Optus’s existing
networks) can be used and what not. We have also got satellite and other assets” [which could be offered].”

This presumably opens the door for owners of other compatible fibre networks to swap their way in as well. For instance: Leighton Holdings’ NextGen Networks which owns 8500km of fibre linking State capitals. Leighton chairman David Mortimer has been a major investor in Acacia, which was one of the rejected bidders to build the NBN.

Asked whether he thought the $43 billion fibre-to-the-premises project would be financially viable, Krishnapillai said Optus was confident that commercial considerations would stack up. He said that, based on results of similar projects in other countries, the NBN would add 2-5 percent to overall growth.

“Assumptions based on today’s usage are misplaced,” he added.

Observers note that Telstra could also offer to throw in existing fibre networks in return for equity  so gaining access to the new network which will be a hot competitor to Telstra’s existing copper wire net.

Presumably part of any such deal would include the Government dropping plans to force Telstra to divest itself of its HFC cable network and its share of Foxtel, and going easier on structural separation issues.

Unlike Optus, Telstra does not have a satellite service to offer. Optus has two D-series satellites in orbit capable of delivering the NBN to remote areas in Australia; a third D-bird is set to fly this year.

ASX-listed comms services provider NewSat has been quick to remind the Government that back in 2007 it offered the Howard Government a satellite proposal for bush broadband delivery “which best fits the next generation technology solution announced by the Prime Minister”. The deal “still stands and remains open,” CEO Adrian Ballintine reminded shareholders and the ASX.

Also possibly interested would be Abu Dhabi-based Thuraya, whose geosynchronous satellite is currently providing outback mobile phone services, including some marketed by Optus. ­ David Frith