NBN good for economy, ROI not so easy: Report

Peter Dinham
Monday, 11 May 2009 11:30

Business IT - Technology

In addition to user and service benefits, Frost & Sullivan notes that the NBN will bring important changes to the Australian telecommunications service provider landscape, suggesting that once the network becomes fully operational, telcos such as Optus, AAPT and Primus will be able to “compete on a level playing field against Telstra's retail division without needing to purchase wholesale access from the incumbent.”

Harpur makes the point that, under the NBN plan, optical fibre will run in parallel with Telstra's copper network, and that control of the copper network to residential premises has historically been a key factor in enabling Telstra to maintain its dominance of the local access network.
 
“With the building of a parallel fibre NBN network directly to homes and businesses, Telstra's dominance of this section of the network will no doubt be eventually threatened,” Harpur says. “However, it is likely to take the government at least eight years to get its network fully operational, assuring Telstra of significant breathing space before it has to compete with other telcos for wholesale access.”

Frost & Sullivan's report includes consideration of a possible restructure of Telstra, as recently mooted in a government discussion paper.

However, the firm says that, while the government has raised the possibility of going down this path in the past, it notes that this time, it seems to have much more conviction behind its proposal, and “ensuring some form of separation of Telstra's divisions is in line with its vision of a new network which gives equal access to all players on wholesale pricing levels.”