Telstra forges NBN wholesale 'proof of concept'

Approaches brave new world with caution.

Telstra has begun on-selling National Broadband Network services to access seekers under a "proof of concept" it hopes will guide the creation of a sub-wholesale product.

The telco, which already retails NBN services in Tasmania and at the first mainland release site of Armidale, this week announced its first trial of wholesale aggregation services with telco channel provider M2 Telecommunications.

The service, connected to a single regional customer in Armidale, would come ahead of a wider trial at all five mainland sites.

M2 Telecommunications had told investors earlier in the year it expected to begin sub-wholesaling and retailing NBN services through its subsidiaries in the second half of this year.

It has reportedly not finalised whether it will continue such an arrangement through Telstra after the trial.

Telstra's announcement follows similar moves by a string of aggregators, including AAPT, Platform Networks, Nextgen and ispONE, each of which were vying to provide a mixture of NBN, backhaul and related services.

Optus has also foreshadowed plans to aggregate wholesale services over the $36 billion NBN.

Though many of the aggregators have so far claimed to be first in some aspect or another, Telstra believed it was the first to actually provide a sub-wholesale service to an end-user.

An NBN Co spokesman was unable to confirm this at time of writing.

Telstra had undertaken a single on-boarding and network certification process for both its retail and wholesale offerings.

M2 Telecommunications would likely remain the only wholesale customer of Telstra during the first trials of the network on the mainland in an attempt to determine the viability of a wholesale product on access infrastructure not directly owned by the incumbent telco.

"It's a very low-scale trial, more like a proof of concept, and no doubt as NBN rolls out its network further, we're still in the process of defining our final product strategy," Trevor Brunton, executive director of service and strategy at Telstra Wholesale, told iTnews.

Until a final strategy was put in place, Brunton said the trial would be limited to a small section of Telstra Wholesale staff.

The division would not engage in wider retraining or restructuring until a firmer strategy was finalised before the end of the year.

The strategy would be overseen by newly-appointed group managing director for the wholesale division, Stuart Lee.

Lee, who would replace acting director and sales manager Glenn Osborne, would be required to manage what was effectively a two-way relationship with NBN Co.

Though Telstra would wholesale NBN services to other service providers, NBN Co would also be a wholesale customer of the telco in leasing Telstra's passive infrastructure.

Nevertheless, Brunton didn't shy from the changing circumstances Telstra was faced with.

"Moving into the NBN world, Telstra obviously moves away from being an access provider and becoming an access seeker so it is quite a significant change to our business model and it will be a steep learning curve for us, which is why we've been keen to participate in this trials," he said.

"We're just in experimentation mode to understand the economics of dealing with NBN, the practicalities."