Telstra signs up for NBN fibre-optic superhighway

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Telstra signs up for NBN fibre-optic superhighway

By Lucy Battersby

TELSTRA will start selling broadband and telephone retail services on the government's new fibre-optic network after signing a deal with federal government-backed NBN Co over the weekend.

The agreement comes as Telstra waits for the competition watchdog to approve plans to internally separate fixed-line retail and wholesale operations. Once approved, Telstra and NBN Co can finalise a deal which the telco values at $11 billion. A decision is expected as early as this week.

Telstra can now start marketing NBN services.

Telstra can now start marketing NBN services.Credit: Peter Mathew

The Telstra board had discussed how to distribute that money among shareholders, but could not make an announcement until the deal was finalised, chief executive David Thodey said recently.

Telstra was the last large carrier to start retailing services over the national broadband network (NBN). Optus, iiNet, TPG, Primus and others signed interim wholesale agreements with NBN Co earlier this year. All telcos get the same prices and conditions on the network, regardless of scale or size.

Unless a telco has signed a commercial agreement with NBN Co, it cannot connect customers to the network. By signing a deal Telstra can now start marketing NBN services and competing for customers in areas that already have connections or have been earmarked for development.

About 2600 homes and businesses are now using fibre-optic connections, and a similar number of premises in remote areas the satellite service, according to NBN Co. Already 18,200 premises have been connected and construction will start at a further 620,000 sites this year.

Households and businesses were not charged for services on the NBN until their telco signed a commercial agreement.

However, NBN Co can only sign carriers up to a 12-month agreement because it has not yet finished setting up its regulations with the Australian Competition and Consumer Commission. The ACCC last year berated NBN Co for trying to force carriers into five-year wholesale agreements before its regulations were in place. An industry consultation is under way.

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