Telstra puts broadband plans on hold

Pressure is building on the Government to deliver its national broadband plan in quick time as signs emerge that internet companies could be delaying investment plans until after the tender process for the new network.

Telstra yesterday became the first telco to announce it was likely to put plans to invest in new technology on hold until a decision is made on who will receive $4.7 billion from the Federal Government to roll out a national high-speed broadband network.

“In view of the FTTN (fibre-to-the-node) process now commencing we will review current investment plans and it is likely that some investments will be put on hold until we know the outcome of the bid process,” Telstra said in a statement released to the ASX yesterday.

Although no details were given on how consumers could be affected, Telstra’s statement could mean a halt to a fibre-optic cable roll-out program, according to David Kennedy, a broadband analyst with communications consultancy Ovum.

“Clearly what they’ll be looking at is any investments to the fixed access network, which basically means putting in fibre-to-the-node in metro areas. Those kind of upgrades could be put on hold,” Kennedy says.

Uncertainty about who will be tapped on the shoulder to build the new fibre-to-the-node network could also be causing smaller broadband players to stall the roll out of their own niche infrastructure roll-out plans.

But iiNet spokesman Stephen Dalby said his company has not altered any of its investment plans in light of the Government’s fibre-to-the-node plans.

“I don’t think it’s true to say it has affected our investment plans at all. I regard a lot of the comments Telstra has made as political gaming,” Dalby says. “There may be some uncertainty but no real impact on our current plans, especially since a project of that scale will take years to roll out.”

The development means all eyes will now be on Communications Minister Stephen Conroy to meet his self-imposed deadline of commencing construction of the fibre-to-the-node network at the end of this year.

“That timetable will be hard to meet given the complexity of the issues that need to be resolved in the tender process and building can begin. It’s not impossible, but they really have to get their skates on,” Kennedy says.