Out of the blue Telstra decided to submit a non-conforming NBN bid and subsequently Telstra has been removed from the list of vendors to be considered for this contract. Telstra's gamble is substantial and may open the door for true competition in the Australian telecommunication industry.
An important aspect of the NBN tendor that has not been getting enough attention is the minimum broadband download speed of 12 Mbps called for under the tendor. The minimum speed should be no less than the maximum speeds achievable with ADSL 2+. A broadband download speed of 20 Mbps for remote customers ramping up to 100 Mbps for capital city customers should be achieved as part of the NBN upgrade.
There are still many unknowns.
Will the NBN contract provide for a second national backhaul network? Currently the only effective network connecting capital cities with regional and remote centres is owned by Telstra and consequently costs for use of the backhaul network are high.
How will access to last mile copper be achieved and what compensation is Telstra likely to want? Implementation of the NBN will require use of copper between the new fibre nodes and business premises or residences. This copper is currently owned by Telstra. Two approaches can be used. The first is to pay Telstra a fee for the use and maintenance of the copper. The ACCC is likely to be used to determine a fair price for copper access. The second approach is for the Government to purchase the copper from Telstra and to make it available to telecommunication companies using the NBN.
At the other end of the fibre to the node, what access to exchange buildings will occur or will the NBN bypass the existing exchange buildings and feed directly into the national network? Network build designs that minimise the use of facilities or network links owned by a competitor such as Telstra is likely to be a key aspect of the winning bid. What will this mean, is it achievable or will this also become an aspect of the NBN that will draw Telstra into the negotiations?
2009 promises to be an exciting year in the Telecommunications industry. More than $20B is being spent to achieve a new network with a minimum required download speed that should have been achieved in Australia 5 years ago. The largest telecommunications company is now on the outer looking in. What is Telstra going to do in 2009?