Telstra sticks with Velocity fibre business

Telstra has not withdrawn its Velocity fibre business from the market after signing a heads of agreement with NBN Co, the telco said today.

A spokesman for the telco responded to claims aired on the Australian FTTH blog that Telstra had reportedly "withdrawn from the market of providing fibre to developers".

The report cited a "member communication" purportedly sent by the Urban Development Institute of Australia (UDIA's) South Australian division.

Telstra refuted the report to iTnews, confirming that Velocity remains open and available as an option to housing developers.

"Telstra Velocity has not withdrawn from the market," the Telstra spokesman said.

"Obviously the Government's change of policy will have an impact on the industry and we are currently reviewing the change and working with the Government to determine how we transition to the new arrangements."

One of the features of the financial heads of agreement struck between Telstra and NBN Co on Sunday is that NBN Co is now the "wholesale supplier of last resort" in Greenfield (new) housing estates from January 1, 2011.

It remains unclear exactly how this will work; however it appears to be business-as-usual with developers able to choose which fibre builder they use to fulfill their requirements under the Federal Government's fibre mandate for greenfields estates.

The heads of agreement provided some clarity on what NBN Co's role in greenfields estates would be - something that had been a source of contention for the past few months.

Fibre builders wanted NBN Co to stay out of estates; housing groups had called on NBN Co to be an option available to developers.