Optus signs $800m NBN Co deal

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Optus signs $800m NBN Co deal

Optus to decommission cable network in some areas as customers are migrated.

Optus has signed an $800 million deal with NBN Co that would see fixed line customers of the nation's second largest telco migrated across to the National Broadband Network as it is rolled out.

The agreement would ensure Optus decommissions its hybrid fibre coaxial (HFC) network in areas where it is not used to service the company's mobile infrastructure or business customers.

It remains unclear exactly how Optus would continue serving Foxtel or Optus Television customers under the agreement.

"Optus will continue to work with its partners to offer video and TV services in an NBN enabled world," an Optus spokesperson told iTnews when asked for comment.

Unlike the Optus deal, Telstra has moved to retain its cable network to provide pay TV services under a similar, $11 billion deal also struck with NBN Co today.

Optus customers will be migrated once NBN Co deems a rollout region "ready for service" or where 90 percent of homes are passed with fibre.

The telco estimated the migration would commence in 2014 and take four years.

NBN Co would progressively pay Optus for the migrations based on the number of customers moved across to the $36 billion network.

Both Telstra's and Optus' deals with NBN Co are subject to approval by the Australian Competition and Consumer Commissions and private tax rulings from the Australian Tax Office.

"The agreement with Optus is expected to enhance the take-up rates on the National Broadband Network, thereby improving NBN Co's revenue plan," NBN Co chief Mike Quigley said in a statement.

Optus has been negotiating the deal for months, and has previously implied all bets were off if the telco did not receive regulatory assurances around key pieces of legislation surrounding the $36 billion network.

The deal would also strike a blow to previous criticisms made by the opposition, which has pointed to the 2.3 million premises passed by the hybrid fibre coaxial networks of Telstra and Optus as a reason Australia didn't require an NBN.

Optus announced an upgrade of its cable network to DOCSIS 3.0 in 2009, to provide downlink speeds of up to 100 Mbps, equivalent to the NBN.

"Optus was born in competition," Optus chief Paul O'Sullivan said. "We intend to use the NBN to turbo-charge competition and to deliver the full potential of a 21st century digital life to customers."

More to come...

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