Mark Gregory's Blog

Telstra becomes a Retailer

admin@networkengineering.org.au — Sat, 19 Jun 2010 14:00:00 GMT

Telstra has agreed to provide infrastructure access to the NBN Co, including pits and ducts around Australia. The total amount of the deal brokered between the Government and Telstra is likely to amount to more than $11.5 billion. Telstra was also successful in offloading the universal service obligation for the delivery of telephone services, payphones and emergency call handling from 1 July 2012.

England's Major Step Towards More Competition

admin@networkengineering.org.au — Thu, 01 Apr 2010 14:00:00 GMT

England's telecommunications regulator, Ofcom has ordered carriers to slash the cost of connecting a call between mobile networks and between landlines and mobiles by about 90 per cent over the next five years. Mobile operators were in general against this move by the telecommunications regulator and have voiced concerns that chicken little would have been proud of.

Is This The Start of Competition?

admin@networkengineering.org.au — Fri, 04 Dec 2009 14:00:00 GMT

Leighton Holdings' Nextgen Networks has been awarded a $250 million contract to roll out fibre-optic backbone links in regional areas. Is this the first signs that the NBN will provide competition to Telstra in the backhaul network?

NBN - The New Monopoly

admin@networkengineering.org.au — Thu, 17 Sep 2009 14:00:00 GMT

This week we have seen the government tell Telstra that it must split into two voluntarily or face a range of sanctions. Whilst this action by the government could be seen as a long overdue effort to split Telstra into two entities, even if they are only at arms length and thereby gain a clear view of the Telstra wholesale divisions pricing to the Telstra retail division and to other retail customers. Interest is now growing on what the government will do next. Will the government attempt to buy the Telstra wholesale division or some part of it and thereby create a new monopoly - the NBN.

From Left Field Comes the ACCC

admin@networkengineering.org.au — Fri, 04 Sep 2009 14:00:00 GMT

An unexpected move by the ACCC could see the value of Telstra's copper network change and the outcome could be confusion. If the copper network becomes more valuable for Telstra over the next 5 years, will this reduce Telstra's need to participate in the national broadband network? Competitors Optus, Primus and others are likely to oppose the copper access pricing change in submissions to the ACCC.

Telstra's Claims Must Be Verified

admin@networkengineering.org.au — Fri, 19 Jun 2009 14:00:00 GMT

Telstra's website makes the claim that for the Telstra Next G network 99% of the Australian population is covered. This claim just does not hold water. Many Australian towns and large regions of the country do not have Telstra Next G coverage. A recent journey through some of the regions bordering Australia's remote regions has found that Telstra's claim is very likely to be overstated. The Australian Consumer and Competition Commission must look into the accuracy of Telstra's claims.

Decision Made - Now For The Easy Part

admin@networkengineering.org.au — Sat, 11 Apr 2009 14:00:00 GMT

The Government has made a giant leap and will now form a company that is 51% public owned to build fibre to the premise for 90% of Australians. The remaining 10% of the Australian public that will not gain access to fibre to the premise will be supported by better wireless and satellite broadband access.

More details emerge daily and summaries of what we have learnt to date abound. What is of more interest is what we have not learnt so far through all of the press releases and statements by Government MPs. The list of things we need to know is quite large and some of the more pressing items include whether a new cable will be laid to Tasmania or will the fibres laid with BassLink to be used to overcome the current Telstra connection bottleneck to the Apple Isle. What this leads onto is the question of a second national wholesale backhaul network and whether this is going to be built independently of the existing Telstra wholesale backhaul network or will Telstra be able to offer existing infrastructure for equity in the new entity?

One scenario that sends a chill down the spine of many is the thought that Telstra may utilise the strategy of selling existing infrastructure into the new entity and then when 2022 rolls around, Telstra buys the company either through the initial offering or through the market after the dust has settled. If you were running Telstra over the next 5 to 10 years you would have to consider this a reasonable approach as the status quo today remains after 2022 and the cost to shareholders should be minimised by the initital sale of infrastructure for equity in the new entity and subsequent profits to shareholders. This approach also means that the new entity would be responsible for the upgrade and maintenance of any infrastructure that Telstra was able to offload. Telstra may consider the strategy of trying to sell anything from the Telstra wholesale backhaul network that is in need of upgrade or is expensive to maintain and can be bypassed if it is sold to the new entity.

Anyone want copper cable? Selling cheap. Telstra management has been quick to announce the Telstra strategy to move beyond copper to fibre to the premise. The recently announced upgrade to the cable network is a pre-emptive strike at providing fibre to the premise to the customers that Telstra values most. The people currently paying for FoxTel are in Telstra's eyes more likely to pay for FoxtTel and 100 Mbps. By securing this market quickly Telstra could starve the new network entity of a valuable market segment.

Will the $43B provide a completely new wholesale backhaul network built around Australia using the latest technology or will the new entity be looking to purchase second hand network segments? It does not need to be stated again that the most important announcement yet to be made by the Government is whether Australia will be provded with a second wholesale backhaul network that is independent of Telstra and for that matter independent of any other telecommunications company. Two competing wholesale backhaul networks are vital for true growth to occur in the telecommunications sector. Through competition and growth will come more services and cheaper prices for consumers.

The expenditure announced and the 8 year timeline for the final result to be achieved leads to the anticipated outcome being something that Australia needs. Australia is no longer a manufacturing nation and is one of the few countries in the world today that has made significant reductions to tariffs. The future for Australia lies in its ability to utilise technology to develop new opportunities for employment. To remain stagnant, as has been the case for the last 10 years under the Telstra monopoly, Australia would have ended up with a crippled future in the one area that is left for Australia to excel - technology. A bold step has been taken and we must support it.

National Broadband Network Decision Soon

admin@networkengineering.org.au — Fri, 03 Apr 2009 14:00:00 GMT

The Federal Government has indicate the National Broadband Network (NBN) tender winner will be announced soon. Of more interest to people in the indusry is the legislative framework that will accompany the decision announcement. Will Senator Conroy be able to convince his colleagues to provide a truly competitive framework for the NBN such that the telecommunications sector can move forward with fair and reasonable competition for all.

Telstra's Gamble and the Year to Come

admin@networkengineering.org.au — Fri, 19 Dec 2008 14:00:00 GMT

Telstra is now out of the NBN race after submitting a non-conforming tendor response. Telstra's gamble on what the future holds will provide many twists and turns in Australia's effort to gain a next generation network.

Telstra is now the Tender Leader

admin@networkengineering.org.au — Fri, 31 Oct 2008 14:00:00 GMT

Telstra now appears to be in the box seat to win the Fibre to the Node tender. The global financial crisis has caught competitors unaware and they will now find it difficult to fund their bids. Telstra should be immune from the problem of finding global finance for the rollout with anticipated revenues being redirected to cover the cost of the Telstra bid.