Optus: NBN deal makes 'absolute sense'

Optus has thrown its weight fully behind the government's decision to change the goal posts of its National Broadband Network to fibre-to-the-home technology and to form a new majority government-owned entity to build it.

Maha Krishnapillai
(Credit: Slattery IT)

Optus director of government and corporate affairs, Maha Krishnapillai, said that Optus was absolutely supportive of the announcement this morning. It would create a level playing field for all providers to compete from, initiating "root and branch reform".

The decision to provide fibre-to-the-home to 90 per cent of the population instead of fibre-to-the-node to 98 per cent was also a wise decision, he believed, eliminating Telstra's ability to frustrate the process.

It had taken a while for the government to reach a decision on the NBN and associated regulatory reforms, but Labor had decided not to go with a policy made using information it had obtained while in opposition, Krishnapillai said. "That's a smart decision," he said.

The government's discussion paper on regulatory issues up until the network could be built was a gem, according to Krishnapillai. "It picks up on all of the things and more that we've been arguing for in terms of regulatory reform."

He guaranteed that Optus would be responding to the paper. "We'll be saying that we love it and we want you to do everything," he said.

When asked whether the company felt out of pocket as TransACT had when the government announced that no bidders had been found satisfactory, Krishnapillai said "No Way!" He said even that in hindsight, it was better that the OPEL network had not gone ahead, as the new plan would mean a much more cohesive broadband plan for the nation.

Krishnapillai admitted that "the devil [was] in the detail" about the plan, saying that its success would depend on what came out of the Senate in terms of regulatory reform, how the industry assisted and which vendors would be chosen.

Other players in the industry have also approved.

"This is the best of all possible outcomes and will ensure Australians have access to fast, affordable and competitive broadband," iiNet managing director Michael Malone said in a statement, with the government meeting all the key criteria industry was looking for in a National Broadband Network: open access, structural separation, fixing backhaul blackspots and regulatory reform.

Internode managing director Simon Hackett wrote on Whirlpool that it would be 10 years until the network would be up and running, but praised the project for avoiding the copper network which would meant that investments already made by players could continue to run.

"I'm gobsmacked. If they do what they promise, they've actually got it right, and we might just turn into a broadband front-runner country 10 years from now ... after all," he said.

"This has the potential to be the most significant change this industry has seen since deregulation in 1997. And just as deregulation kick-started competition, today's announcements have the right ingredients to set a solid foundation for a truly competitive 21st century telecommunications industry," Macquarie Telecom national executive regulatory and government Matt Healy said in a statement.

"Once implemented, if the result of the market reforms announced today does nothing more than bring Australian prices into line with OECD averages, the result will be dramatic," David Forman, executive director Competitive Carrier's Coalition said in a statement. He believed small and medium-sized businesses could expect price cuts of 40 per cent.

"We congratulate [Communications Minister Stephen] Conroy and the government on making such a far-sighted decision on industry reform in a way that no government had previously been willing to do," Forman said.