Australia Unveils $31B FTTP Plan

Australia's government today unveiled its blueprint for a A$43 billion (US$30.7 billion) fiber-to-the-premises (FTTP) national broadband network (NBN), and in doing so handed incumbent operator Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) a second chance to be involved in the country's NBN plans.

The government had previously issued an RFP for private operators or consortia to build a fiber-based NBN, but had disqualified Telstra from the process. (See Telstra Dumped From FTTx Project.)

Now, though, the government has effectively handed the national operator a reprieve by announcing it has "terminated the Request for Proposals (RFP) process" because, according to an independent panel of experts, none of the remaining proposals "offered value for money. The Panel noted the rapid deterioration of the global economy had a significant impact on the process."

Instead, the government is establishing a new public/private partnership company that, during the next eight years, will invest A$43 billion to build and operate a fiber-to-the-premises (FTTP) access network that will connect 90 percent of Australian homes and businesses with downstream speeds of up to 100 Mbit/s. That, the government hopes, will spur the development of new business and residential services, such as unified communications and IPTV.

FTTP includes a mix of fiber-to-the-building (FTTB) and fiber-to-the-home (FTTH) deployments.

The remaining 10 percent of homes (in remote rural areas) will be hooked up via wireless or satellite links that will provide broadband speeds of up to 12 Mbit/s.

The government, which expects the network construction process to support 25,000 jobs (on average) each year for the next eight years, will be the majority shareholder in the new venture, but it anticipates "significant private sector investment in the company." That provides a way back in for Telstra, which saw its share price rise by more than 4 percent to A$3.35.

Telstra issued a positive, if somewhat guarded, statement following the unveiling of the plans. "We will work with the Government to assist with the implementation of its strategy, but will remain at all times committed to ensuring the best interests of our shareholders, employees and customers," noted the incumbent.

Telstra's main rival, SingTel Optus Pty. Ltd. , also praised the announcement, and took the chance to jab at its competitor. "This is a very positive outcome for consumers and business right across the country. It will end Telstra’s monopoly control of the national communications network into Australian homes," stated Optus.

Affordable broadband for all
The government, which is to provide an initial investment of A$4.7 billion (US$3.3 billion), says the aim of the NBN is to provide every house, school, and business in Australia with "access to affordable fast broadband."

The model is one that's becoming commonplace around the world -- the creation of an open network that can be used by multiple service providers on equal terms. The government noted that the new plan represents "the biggest reform in telecommunications in two decades because it delivers separation between the infrastructure provider and retail service providers. This means better and fairer infrastructure access for service providers, greater retail competition, and better services for families and businesses."

Singapore just announced the latest stage in its move towards a national, shared, open-access network. (See AsiaWatch: StarHub Lands NGN Role.)

But there's a long way to go before the dream of a national broadband network for Australia, a nation of 21 million people, becomes a reality. The government recognizes this, though, noting that it now needs to: organize an "implementation study to determine the company's operating arrangements, detailed network design and ways to attract private sector investment"; roll out fiber links between "cities, major regional centres and rural towns" to address backhaul "black spots"; introduce new legislation to govern the new company and ensure that all greenfield housing developments include fiber access links; and initiate a consultative process that will result in changes to Australia's telecom regulations.

For more details, check out this outline of the new plan on the Australian government's Website.

Telstra had planned to build a new fiber-based access network of its own some years back, but was thwarted by regulators in late 2006. Instead it has concentrated on building out its 3G mobile network, and is currently in the process of rolling out a 21 Mbit/s downstream service. Check out this LRTV interview with outgoing Telstra CEO Sol Trujillo to find out more. (See Telstra Abandons FTTN Plan and Trujillo Quits Telstra.)

— Ray Le Maistre, International News Editor, Light Reading

bollocks187 12/5/2012 | 4:07:37 PM
re: Australia Unveils $31B FTTP Plan

Telstra is a sorry performing Operator. For those of you whom have not had the displeasure of meeting Telstra, it is similar to meeting folks in the early 1980's. They are outdated and poor stratgeic thinkers. They will grind the FTTP out over the next 10 years. No doubt Alcatel and its little 'black' mailing will get the business.


rjs 12/5/2012 | 4:07:29 PM
re: Australia Unveils $31B FTTP Plan

Finally they got this right!

Enough with monopolies.  The bit carrier has to be separated from the service providers.It is the only way.  I hope something similar gets done in US, I am not holding my breath though!

We are all fully aware of what conflict of interests can do to economy ... you just have to read the papers on the mess the banks have created.








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