Telstra Wholesale partners charmed by NBN deal

The $11 billion agreement between Telstra and NBN Co has given Telstra Wholesale resellers the confidence to create long term business plans that include the National Broadband Network next to their incumbent carrier.

Until now, Telstra Wholesale fixed line and cable service resellers such as Telcoinabox lacked a clear path to the NBN.

Without Telstra's involvement the telecommunications resellers had the option of either creating a direct link to the NBN - which could have proved costly - or risk not getting involved at all and sticking with Telstra.

For the telco reseller channel - those that don't own or build their own infrastructure and instead rely largely on Telstra Wholesale - yesterday's announcement completed a missing link to the NBN.

The agreement will provide NBN Co with access to Telstra's passive infrastructure (pits, ducts and backhaul fibre) and eliminate Telstra as a fixed-line wholesale competitor to the Government-owned entity.

"The great thing about this deal is that if Telstra didn't do the deal and I had to [use] the NBN, which we all will be [using], I would have [had] to migrate and port everything over myself and manage that port and migration," said Telcoinabox managing director Damian Kay.

"It would have been absolutely diabolical.

"If I connected fully with NBN, I would have had to deploy equipment and people and expertise to 220 odd fibre access points. The gap that Telstra fills for me in this environment is that if I chose not to be directly involved in the NBN, I can actually have Telstra deliver it to me at one, two, three or State based points.

"As a fairly large reseller - that's not into building my own network - that is such a great result for us," he said.

If the financial heads of agreement is approved by Telstra shareholders, the Federal Parliament and competition watchdog the ACCC, Telstra will "effectively take on and resell the NBN at a layer one level," said Kay.

"Telstra will pick up the fibre and put the equipment in all 220 odd fibre access points and will then be able to deliver it to me.

"I don't have the expertise to interconnect to 220 odd access points, I don't have the size," he said. "In fact, now that Telstra is part of the process, Telcoinabox will automatically get migrated by Telstra, by their expertise onto the NBN.

"And that is worth millions for me," he said. "It allows us now to plan, we've been sitting back, now we can strategically plan," he said.

Southern Phone Company general manager Phil Herrick was cautious with his enthusiasm around yesterday's announcement. He is awaiting the "fine detail" of the NBN itself.

But his thoughts were clear about Telstra's inclusion.

"We're happy with the announcement," he said. "The Telstra infrastructure has been built and paid for by the people of Australia over many years, it would be criminal to cast that aside and start to dig new pits and pipes.

"So it's a common sense solution and we congratulate both parties for sitting down and trying to work something out. We take note that the announcement is not a done deal but they're obviously showing good will," he said.

The regional-based reseller was funded by the Federal Government nearly ten years ago to focus and create competition in regional Australia. What interests this company most "is what will happen to the 10 percent that the Government says is out of the NBN's fibre reach," said Herrick.

For Utilibill chief Morgan Duncan, which resells provisioning and billing systems, yesterday's announcement means it's "game on."

"Now that Telstra's on board, we've got movement and I think that's been the biggest frustration for many people. There's so much talk and we've had a few little trial sites but until Telstra's involved and that involvement was determined we're not really [there].

"For our resellers the fact that Telstra is now involved they will have a very clear and assisted transition to the NBN world. It's of major importance for all those providers that sit on the Telstra network," he said.

Herrick said the deal is "probably not as important" for builders that have their own DSLAMs. But for "many, many providers that don't have their own infrastructure - this is a great bit of news because it means they will have the support of Telstra during that transition to the NBN," he said.

The devil is obviously in the detail, he added.

ISP's including Exetel and Internode have given mixed reactions on the deal with Internode chief Simon Hackett calling the announcement a "press release, not a real agreement".

Opposition

Meanwhile, the Federal Opposition has said that it will scrap the $11 billion agreement should it come to power at the next election, despite widespread industry support for the deal.

Kay, who describes himself as a "blue ribbon Liberal", wasn't impressed.

"I have never ever voted anything else and I am absolutely disgusted that they would contemplate rolling this back," he said.

"I can't deal with that policy decision and I think it's flawed."