Telstra's $1.6 billion NBN deal makes ACCC anxious

Telstra has landed a $1.6 billion contract to build out and upgrade the NBN’s hybrid-fibre coaxial (HFC) network.

The telco announced it would cover all design, program management, construction management and scheduling activities within its HFC footprint in Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast. The deal is expected to run until 2020.

Field construction activities will be undertaken by NBN partners, while Telstra delivers in-exchange construction and limited upstream in-field construction.

Telstra and NBN signed a memorandum of understanding for the deal in December, and the telco has already undertaken “early work” to help with design and planning.

“Telstra has a long and proud history in network construction and we believe we will bring great expertise to this important part of the NBN network. We are already mobilising our workforce to ensure we support NBN in their roll out schedule,” Telstra chief executive Andy Penn said.

Last December, Telstra won multi-year contracts to support and maintenance the network build in areas covered by its HFC network worth $80 million in the first year. At the time, NBN said it was in similar discussions with Optus.

Under the government’s multi-technology mix NBN, 34 percent of premises will receive HFC connections while around 38 percent receive fibre-to-the-node or basement connection.

ACCC concerned

Consumer watchdog the Australian Competition and Consumer Commission (ACCC) has expressed concerns over the deal around its implications for competition.

ACCC chairman Rod Sims specifically cited the recent deal, saying it could give Telstra a head-start in selling retail services over the NBN.

“We have raised several concerns with Telstra and NBN Co, including that Telstra may receive a competitive advantage if it has access to better information than other service providers or if it is able to use infrastructure built for the NBN network before that infrastructure becomes available to other retail service providers,” Sims said.

ACCC added that it was looking into proposals that Telstra and NBN have set out aimed to address competition concerns.