NBN to pay Telstra to fix telco's copper network

Telstra will be paid by NBN to fix faults in its copper network under a new deal signed by the pair today.

The telco today announced it had won two contracts - one for three years and the other for four years - to fix faults on its copper network.

The two contracts combined will be worth around $80 million in the first year alone, Telstra said.

The four-year contract also involves Telstra fixing faults and connecting new services on the NBN across all its myriad technologies in certain areas after a customer has migrated to the network.

Both contracts have extension options, and work will start early next year.

NBN also today said it had signed "operate and maintain" contracts with Service Stream and BSA Limited for FTTP, FTTN and HFC, which similarly cover activations and ongoing maintenance. 

“To optimise the network build and provide access to an excellent service for Australians, united partnerships with the construction and telecommunications industry are a key priority," NBN CEO Bill Morrow said in a statement. 

“This year we have re-set our relationships with the industry by improving the way we collaborate and structure competitive, flexible agreements with our partners.”

NBN and Telstra have also signed a memorandum of understanding for a contract under which the telco would support the build of the NBN in areas covered by its HFC network.

The contract would involve the design, engineering, procurement and construction management of the NBN network in the HFC footprint.

It is expected to be signed early in 2016, Telstra said.

In the meantime, Telstra and NBN have agreed the telco will undertake some "early works" to prepare Telstra NBN exchanges and help with planning and design in HFC areas.

NBN said it was discussing a similar arrangement with Optus for its HFC network.

“I am delighted that we have an opportunity to support NBN by leveraging Telstra’s knowledge and experience in network design and construction management, as well as continued maintenance," Telstra CEO Andy Penn said.

"We have said all along that we are committed to providing whatever commercial services NBN needs to meet its business objectives."

Early this month it was revealed NBN was expecting to be hit with a $641 million bill to repair sections of the copper network it bought from Telstra.

Leaked documents revealed the bill would come in ten times higher than what the network builder had expected the copper network - which it acquired from Telstra as part of the 2014 renegotiated $11.2 billion deal - would cost to fix.

The federal government's strategic review of the NBN put the cost of remediating the copper at $2685 per node.

The leaked documents, sighted by iTnews, revealed NBN expects this will in reality sit at $26,115 per node. The company also expects to pay $520 million to connect "high-cost" premises located large distances away from nodes.

The copper network forms the basis for the Coalition's favoured fibre-to-the-node technology. Most of the national network - 38 percent - will be connected by FTTN when the rollout is complete.

In November, additional leaked documents revealed NBN was considering overbuilding the Optus HFC cable it purchased for $800 million due to its degraded state.