Sunday, 10 July 2011

Rivals fume over Telstra prices

THE imminent migration of broadband customers to a new Telstra fibre network in South Brisbane has the telco's rivals fuming that the wholesale offers will not allow retailers to offer services at competitive rates.

The fibre-to-the-home network was built after Telstra closed down one of its telephony exchanges in the area to make way for a new Queensland Children's hospital.
Some of the 18,000 broadband services in operation -- a third of which are estimated to be run by Telstra's wholesale internet customers -- have already begun transferring to the new network, with mass migration scheduled from August, but some of the telco's existing wholesale customers are contemplating ceasing services in the area, citing expensive access terms.
Telstra is legally obliged to allow its competitors to lease space in its copper-served telephony exchanges so they can install their own broadband equipment and service customers at better margins, but no regulatory ruling requires that the same terms must apply on fibre networks.
Instead Telstra's competitors wanting to continue serving customers in the South Brisbane area are required to resell and rebrand Telstra services at smaller margins.
Telstra -- which has been liaising with its wholesale customers in the area since announcing its intention to build the fibre network in July last year -- said it had negotiated "competitively priced" wholesale access terms for competitors wanting to use its new fibre network, but some of the telco's rivals said the wholesale costs were up to three times as expensive as the previous copper access terms.
"While Telstra has offered Optus alternative services, they are substantially more costly than unbundled copper-based services. In many cases, the cost of Telstra's wholesale services is equivalent to its retail price," Optus government and corporate affairs general manager Clare Gill said.
Before the copper-based telephony exchange was replaced, Telstra had 32 wholesale customers operating from the South Brisbane area.
Thirteen of those have signed up for the new fibre services.
The new fibre network has also curbed the content serving ambitions of some of Telstra's competitors. While the new Telstra fibre service is capable of delivering download speeds of up to 100Mbps for residential customers, it does not allow retail internet providers to multicast.
Multicasting is a video transmission protocol that reduces transmission costs and allows internet protocol TV to be delivered as an economically efficient service.
"One of Telstra's big shortcomings is that they can't multicast, so it's a definite step backwards to move off copper on to their dodgy fibre," iiNet chief regulatory officer Steve Dalby said.
View the original article here

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