Does the NBN Provide a Better Deal Than TPG?

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Wednesday, November 26th, 2014
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According to a leading telecoms analyst, NBN Co and its multiple retail service providers give MDUs a better deal than vertically integrated operators.

NBN Co has indicated that it is willing to vie for consumer broadband in areas where competition is more intense, undeterred by the installation of technology by its rivals.

Addressing the Senate estimates committee last week John Simon, NBN Co.’s chief customer officer, said his organisation will continue its roll-out in high density areas and apartment buildings even if competitors such as TPG Telecom are already present.

“We’re rolling out there you can identify a high concentration of MDUs (multi-dwelling units),” said Simon. “We would expect at some point that we would enter into an MDU that would have a competing technology set and we would continue to deploy.”

While Simon said that NBN Co was not “following or focusing on TPG,” the Australian telecoms concern has emerged as serious rival to NBN Co since unveiling a fibre-to-the-basement (FTTB) plan over a year ago, with the goal of installing FTTB connections to 500,000 homes in the country.

Concerns have arisen, however, over the possibility that the NBN could be edged out by vertically integrated competitors, who approach body corporates or property managers and offer to install broadband technology in exchange for exclusive long-term agreements for service delivery.

“As far as I know when TPG sign up a building they do have a pseudo-exclusivity clause around the use of existing copper in the building,” said telecommunications analyst Chris Coughlan. “Others could deploy alternative solutions but this would require running new internal cabling – Ethernet or optical – to each unit.

“Malcom Turnbull has made reference to a need for anyone providing alternative fixed access networks to be ‘structurally separated’ in order to provide wholesale access on acceptable terms and prices, something that would probably be regulated by the ACCC. This has yet to occur.”

According to Coughlan, the NBN provides a preferable option for body corporates or property managers compared to its vertically integrated rivals.

“I’d suggest to corporate strata bodies managing unit complexes that a service provided by NBN Co with their multiple retail service providers would be a lower risk and more competitive at the retail level, especially in the medium to long term, than an offer from a single vertically integrated operator where you are required to sign over exclusive use of the existing internal cable,” he said.

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