Telstra's Tasmanian monopoly about to end

Stuart Corner
Wednesday, 16 August 2006 05:45

Business IT - Networking

ISPs trying to crack the Tasmanian market are up in arms at the prices charged by Telstra for backhaul to the mainland, but Telstra's monopoly as the only operator of a fibre link across Bass Strait is about to come to an end, and ISPs and Telstra are likely to face stiff competition from major new entrants.
Stuart Marburg, managing director of ISP Netspace said: "We have seen a continuous drop in the price of bandwidth in every other Australian state, however the price whilst already double that of the rest of Australia, is on the up in Tasmania."

He claimed that "for example, it's more than twice as expensive to move Internet traffic between Melbourne and Hobart as it is between Melbourne and the USA and up to five times more expensive than Melbourne to Canberra."

Marburg called for the Tasmanian Government to look to alleviate the situation either by "placing pressure on Telstra to review their pricing over this vital link for the state, or through opening up the Basslink fibre connection to the mainland to provide an alternative channel for ISPs to service the Tasmanian market."

However the indications are that Marburg might get much more competition than he bargained for: from possibly two major new entrants who will have access to fibre, at cost, all the way from the mainland to the centre of Tasmania's main towns and cities which they will use to deliver a full gamut of communications services.

The Government issued a request for expression of interest from potential strategic telecoms partners in late 2003 and in a briefing on that in January 2004 gave as is preferred option appointing two strategic partners each of which would be granted access on a cost recovery basis to Government owned or controlled telecoms assets including the Basslink fibre and a network linking Tasmania's major centres.

These partners would then use these assets to: "offer a full range of telecommunications services to Tasmanians (on a wholesale and retail basis); offer new competitive broadband services to Tasmanian market; and provide facilities maintenance and management services to the Government," according to the briefing paper.

According to the website of the Government's Infrastructure and Resource Information Service (IRIS) "The existence of these Telstra-independent backbone cables could make a significant difference to the dynamics of the market from 2005. The roll-out of optic fibre across Tasmania will deliver wider choice of competitive telecommunications to homes, businesses and schools and provide opportunities for new and emerging industries to expand and innovate. Ultimately this will create a strong competitor in a market currently dominated by Telstra."