Optus-NBN deal would make 'total sense', says Budde

Optus labelled reports that it was in "advanced talks" to transfer its cable customers to the National Broadband Network as "speculative" but at least one prominent analyst believed a deal made "total sense".

The Australian Financial Review reported today that Optus' 425,000 hybrid-fibre coaxial (HFC) customers could be moved to the next-generation fibre network, although it did not cite a source or support its claim.

Rival Telstra will transfer its cable broadband customers to NBN Co in an $11 billion draft deal announced in June.

Optus did not deny that it was holding discussions with NBN Co but disputed the extent of the discussions.

"The article in today's AFR is speculative," an Optus spokesman said.

"Like all retail service providers, Optus is engaged in ongoing discussions with NBN Co, DBCDE [Department of Broadband, Communications and the Digital Economy] and the industry more broadly around next steps for the NBN."

Telecommunications analyst Paul Budde thought it likely that NBN Co would be interested in Optus' customers given the Government company's deal with Telstra.

"The Government has to do similar deals with other providers," Budde said.

"They can't just favour Telstra."

Budde speculated that NBN Co could also be interested in securing the services of Optus' engineers.

"They're likely to be interested in [Optus'] customers and what infrastructure skills and services Optus has that NBN Co can use," Budde said.

"If that's the case, there could be an outsourcing or leasing contract... where Optus is providing infrastructure services along those lines."

Budde did not think that NBN Co would also be interested in recycling Optus' cable.

He said that about 80 percent of the such networks in Australia were duplicated (known as "overbuild" in industry parlance), a result of Telstra and Optus following each other down the same streets in the '90s before the wasteful practice was halted.

"There would be a lot of duplication [with Telstra's cable network]," he said.

Even if NBN Co was to sort out which HFC cable assets were most useful, it wouldn't be as easy as ripping and replacing the coaxial cable with fibre to ready its network for the NBN, he said.

The ageing fibre sections in HFC networks could also need replacing.

"They [NBN Co] have to be very specific about what fibre is in the ground before they can start making sensible positions on what they can and can't use," Budde said.