Optus signs binding agreement with NBN Co

Stephen Withers
Thursday, 23 June 2011 12:39

IT Industry - Deals

With Optus joining Telstra in signing definitive agreements with NBN Co, the NBN bandwagon is becoming a juggernaut.

Like its big rival Telstra, Optus has signed a binding agreement with NBN Co.

With the two largest carriers in the country agreeing to move their customers onto the NBN, the project's future seems assured, barring political interference.

Optus will migrate customers served by its existing HFC (hybrid fibre coaxial) network to the NBN as it is rolled out, and preference the NBN for fixed line services for those residential and small business customers. NBN Co will pay Optus according to the number of customers actually migrated, but Optus estimates the deal has a net present value of approximately $800 million, post tax.

"The agreement with Optus is expected to enhance the take-up rates on the National Broadband Network, thereby improving NBN Co's revenue plan," said NBN Co CEO Mike Quigley.

Optus plans to decommission its HFC network after the migration, except for those portions needed to service its mobile infrastructure and business customers. This will eliminate ongoing maintenance costs associated with the residential-only portions of the network.

It may also allay concerns about the visual impact of having yet another overhead cable in residential areas with aerial infrastructure. The NBN cable is thinner than that used by Optus, and it can be installed closer to power lines. If the HFC cable is subsequently removed, the overall visual amenity could be improved.