Telstra could adopt 'scorched earth' policy to stymie NBN

Stephen Withers
Thursday, 08 January 2009 11:16

IT Industry - Strategy

Statements made yesterday by Telstra CEO Sol Trujilo suggest the company could sacrifice swathes of its copper network to stave off competition from the successful National Broadband Network.

The assumption behind the proposed NBN seems to be that it would be predominantly fibre to the node (FTTN), with Telstra's copper being used for the last metres into homes and business premises.

But a remark made by Trujilo in a presentation to the Citigroup EMT conference in Phoenix (USA) can be interpreted as a warning that Telstra would consider a 'scorched earth' defence against whichever company wins the NBN tender.

Here's what he said, quoting from Telstra's transcript:

"In the case of wireline retail with our extensive cable footprint we can choose to migrate our metro retail PSTN and broadband traffic onto our HFC cable network."

What would be the point of that? Well, Telstra doesn't have to provide wholesale access to the HFC network. And if it moved all the services in a given area from copper to HFC, it could rip out the copper network.

That would leave plans for a FTTN network high and dry in those metropolitan areas.

What about non-metro areas? Please read on.