Property, eHealth and telco sectors welcome Telstra’s NBN deal

The property, eHealth and telco sectors have welcomed Telstra’s agreement with the National Broadband Network, saying it will deliver them countless benefits and opportunities for new projects.

But analysts argue while the deal may be beneficial for many, it will still change the telecommunications market forever. One commenter even says broadband prices will rise as a result of the deal.

But property developers are happy, saying the new agreement abandons a previously proposed requirement for builders to pay for connecting the NBN to individual homes. Some developers said costs could have risen by a few thousand dollars, which would have been passed on to buyers.

The new deal states developers will only need to cover the costs of infrastructure pits, while the NBN Co. will handle the rest.

Urban Taskforce Australia chief executive Aaron Gadiel said in a statement the decision means developers won’t be shackled with unnecessary requirements.

“Developers have always been willing to play their part in supporting high-speed internet access for Australia, but this role does need to be limited to trenching and ducting on a development site.”

“Anything more would have impacted on the supply of new homes and business premises. This is a win for housing affordability and a commonsense decision that will benefit new home buyers.”

Australand Property Group residential executive general manager Rod Fehring told the AFR the new deal was an improvement on the previous proposal.

The eHealth sector is also set to benefit. With the Government’s plan to introduce an electronic records system, several companies both local and overseas have expressed interest in developing new programs.

Austrade global leader of ICT, health and biotech, Janelle Casey, told ExchangeDaily that during a recent showcase in Tokyo her department received 60 enquiries regarding the NBN.

“At the moment I am trying to develop marketing and capability collateral. I am trying to get an NBN information pack together. All the overseas countries are very curious about what is happening in Australia. So it’s better to get some consolidated information out there.”

Communications analyst Paul Budde also told Fairfax Telstra itself is in a position to participate in providing new health services.

This would make sense, given that chief executive David Thodey said yesterday the company will be looking for new revenue streams as its wholesale division shrinks.

A number of telcos have also welcomed the deal. The agreement means Telstra will become less of an infrastructure provider and focus on retail products, placing it in the same position as several other small telcos.

However, several say future legislation is needed to make sure Telstra isn’t able to quietly negotiate deals with the Government.

Optus’ director of corporate and regulatory affairs, Maha Krishnapillai, told Fairfax he thought the deal presented a good outcome for Telstra and the industry as well. National executive regulatory and government head at Macquarie Telecom, Matt Healy, also said he is pleased with the deal.

iiNet managing director Michael Malone said yesterday that from an initial examination, the deal presented a good offering for both Telstra and the NBN, and the industry would benefit as a result.

But not everyone is excited.

Mitchell Bingemann told the The Australian that as a result of the deal, broadband prices may continue to rise.

“Although the final pricing of internet access through the NBN has yet to be set, experts warn prices could rise if Telstra is allowed to exercise monopoly power over the backhaul network that ferries vast amounts of internet traffic around the nation.”

“It is also unclear how much customers accessing the internet with an ADSL connection over copper wires will pay when they have to switch to the NBN’s fibre network.”

Additionally, Ovum research director David Kennedy says while the deal is a good step forward for Telstra, it is by no means final and will change the face of the industry altogether.

“Regulatory approval will be required for any final deal, either through an authorisation for a non-compete agreement or legislation. Neither of these can be guaranteed, since the regulator has not seen a final deal and the Government does not control Parliament,” he wrote in a statement.

“If this heads of agreement can be developed into a final deal, the implications for the Australian industry are enormous.”

Kennedy says Telstra and the NBN will be aligned as the telco will become the network’s biggest customer.

“It is essential that the rest of the industry demands transparency in any final deal to ensure that no hidden cross-subsidies creep into pricing arrangements between the two companies. It will be the role of the regulator to scrutinise this.”