Analysts have weighed in on Telstra’s $11 billion deal and Optus’ $800 million deal with NBN Co, saying that while the devil will be in the detail, both will pave the way for the future of the telco industry.
Senior analyst at IDC Australia, Trevor Clarke, said the deal with Telstra is one of the biggest for NBN Co.
“It is also arguably the biggest coup for NBN Co and the Federal Government in their plans to roll out the FTTP [fibre to the premises] network and would represent a considerable set back for those opposed to the plan,” he said. “Of course, the success of the whole project is still far from guaranteed and the devil will be in the details and how it is all managed.”
While Optus CEO, Paul O’Sullivan, has touted its deal with NBN Co as promoting greater competition in the industry, Clarke said this can not be guaranteed straight away.
“I think the question of whether the telco market will be more competitive won't be answered for some time and clearly viewpoints on what ‘competition’ means will depend on where you sit in the market,” Clarke said.
“That said, for those providing services over the NBN they will have to compete on a level playing field for a change — and that will mean a very strong focus on service levels for all customers. And that hopefully means a win for businesses and consumers alike.”
As Telstra waits for both shareholder endorsement and approval of its structural separation and migration plan by the Australian Competition and Consumer Commission (ACCC), telco analyst Paul Budde said the deal will need to have a number of issues resolved for it to be a success.
“There are obviously still issues that need to be resolved, as always the devil is in the detail,” Budde said. “What still needs to be sorted out are the regulatory circumstances around the structural separation of Telstra based on the progression of the NBN.”
Budde said that the deal not only signifies a large step forward for the industry, but also a change in the way that the nation views telecommunications.
“This is a shift from a telecommunications based policy to one of national infrastructure,” Budde said. “The NBN will not be used simply for traditional telecoms services but also for e-health, e-education, smart grids and so on.”
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