Conroy provides structural separation guidelines as NBN announces two new contracts

Activity around the National Broadband Network has continued to ramp up, with the Government announcing its requirements for the structural separation agreement for telco giant Telstra.

In a decision likely to be closely watched by rivals, Conroy ruled that Telstra does not have to sell its wholesale services to its retail arm at the same price as it does to rivals.

NBN Co., the project’s owner and operator, has also announced that Ericsson will be responsible for handing the roll-out of its fixed wireless network, while cable operator Silcar is now responsible for the deployment of fibre-optic cables.

Communications Minister Stephen Conroy said yesterday the draft regulatory instruments “create the framework for Telstra’s structural separation”.

“Telstra’s structural separation is a critical reform that will enable the telecommunications sector to provide competitive and innovative services to Australian consumers,” he said.

“These instruments will allow Telstra to achieve structural separation of its ubiquitous copper customer access network and broadband services on its hybrid fibre-coaxial network through the progressive migration of customer services to the NBN.”

Ovum research manager David Kennedy say the documents spell out the Government’s requirements for the ACCC to follow in allowing Telstra’s structural separation agreements to go ahead – they also outline the migration of customers from the copper networks to the NBN and details about that process.

“The ACCC must take this document into account when determining the shape of the formal structural separation agreements,” he says.

“It really puts forward the Government’s requirements for that separation clause which will be attached to Telstra’s license. It’s part of the planning process.”

Conroy goes on to say that he has made it clear the ACCC “must not accept a structural separation undertaking unless it is satisfied Telstra will put in place appropriate and effective transparency and equivalence arrangements”.

Telstra has delayed a shareholder vote on the NBN agreement several times, although one is expected before the end of the year.

Meanwhile, the NBN Co. has revealed Silcar will be responsible for rolling out fibre-optic cable for the NBN in an agreement worth $380 million over the next two years, with the option of extending the contract for another two. The deal will cover Queensland, New South Wales and the ACT.

Silcar is a joint venture with Siemens and Thiess Services. Nokia-Siemens has previously been awarded contracts for the deployment of optical transmission gear.

Silcar will be responsible for connecting nine of the 19 second release test sites and further locations in Kiam, Townsville and Armidale. Further discussions with other companies regarding construction in other areas of the country are ongoing.

NBN Co. also announced Ericsson will be responsible for deploying high-speed fixed wireless networks to cover regional and rural areas, with the 10-year contract to be worth $1.1 billion, and will utilise 4G speeds.

“As the leading 4G technology, LTE has global momentum and its ecosystem is expanding rapidly,” said Sam Saba, head of Ericsson Australia.

“We are able to facilitate the efficient delivery of LTE-based broadband services to communities that are usually disadvantaged because of their remote location.”