Coles hangs up on Telstra at the checkout for Optus NBN

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Coles hangs up on Telstra at the checkout for Optus NBN

Down, down, margins are down.

Grocery giant Coles has dumped its incumbent telco provider Telstra for a combination of NBN Co fibre provided through Optus in a deal the retailer says will span 2400 sites across its shops, supply chain and offices as the national network continues to erode blue chip enterprise accounts.

While specifics around the deal remain scant, including its price tag, duration and capacity, Coles did not put through a notice to the Australian Securities Exchange on Friday when the deal was announced, indicating it falls below material notification threshold, despite the blaze of publicity.

The new deal, described as a “strategic alliance” aims to deliver “high capacity fibre services across Coles’ retail, distribution and support centres nationally, improving performance and unlocking new opportunities to introduce innovative business solutions and technologies.”

Coles’ uptake of the NBN  follows on the heels of Woolworths deal through Telstra to use NBN fibre revealed in late January.

NBN Co has mounted a sustained push to crack the enterprise market, with its wholesale fibre becoming more appealing because it allows businesses to change retail providers without changing their pipe.

"The increased speeds and capacity of this new network give us the flexibility to rapidly increase the speed at which our stores can access and transfer data," said Coles chief information and digital officer, Roger Sniezek.

"We are delighted to be partnering with Optus to leverage the speed, flexibility and agility of the new network, implement new digital initiatives, and ensure we are well-placed to take advantage of emerging technologies in coming years."

The deal includes “the rollout of the new infrastructure” according to Optus which said it will “work directly with Coles' own digital and technology teams to provide them with the skills to fully utilise the capabilities of the network and drive innovation and productivity across the business.”

New or improved plumbing to Coles’ sites, which includes Coles Liquor properties First Choice, Liquorland and Vintage Cellars, is also likely to have a flow-on effect with its supermarkets often the anchor tenants in retail developments and malls, with other retailers potentially downstream beneficiaries of new NBN connections.

A significant element of the deal is that Optus will hook-up with Coles’ flybuys loyalty program that offers shoppers points in exchange for harvesting their shopping data.

It is not clear yet whether flybuys points will be able to be used against Coles customers Optus bills, but both companies are trumpeting the clear potential for retail synergies.

“As the newest partner of the flybuys program, Optus will provide great offers to flybuys members on a range of Optus mobile, broadband and wearable products,” the Optus statement said.

One clearly appealing road to new customers via Coles is its 115,000 strong employee base and their families that could be attracted through work-based discounts and deals.

“flybuys is excited to welcome Optus as a strategic partner to Australia’s most popular loyalty program,” flybuys CEO John Merakovsky said.

“Optus joins our coalition of services, retail, and travel partners providing great value to members and new ways to earn points.”

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