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  • Telstra, NBN Co, Australian Government sign off on A$11b NBN deal

    After two years of protracted negotiations Telstra, the Federal Government and the NBN Co have come to definitive agreements on the structural separation of Telstra and the use of its network assets in the National Broadband Network (NBN).
    The agreements, which need the approval of a majority of Telstra shareholders at the telco’s 18 October annual general meeting, hinge on the Australian Consumer and Competition Commissions’ (ACCC) acceptance of Telstra’s structural separation undertaking and approval of its migration plan.
    Explaining the agreements Telstra chairman, Catherine Livingstone, said in a statement that the Federal Government’s drive to secure the NBN’s future and other related policy changes had brought the telco to conclude that it should participate in the NBN rollout.
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    “The decision to participate was made on the basis that the proposed transaction is expected to provide us with the ability to recover more value for the business than the available alternatives, given the loss of value after the NBN policy announcements,” she said.
    “After rigorously assessing the options before it, including the regulatory and commercial implications of each, the Telstra Board expects to recommend that shareholders approve a proposal to participate in the NBN rollout, subject to the conditions precedent being satisfied.”
    Telstra chief executive officer, David Thodey, said in the same statement that the concluding the agreements would allow the company to focus on its customer service and simplification strategy.
    “The Government will achieve its desired industry structure and the arrangements for the USO and associated social obligations will be reformed to ensure that funding for these public interest services is secured,” he said. “Within this new environment, we look forward to continuing to focus on customer service, content and innovation.”
    According to Telstra the agreements provide replacement revenue, through disconnection payments as twill e rollout of the NBN occurs, and new revenues, through access payments for the use of Telstra’s infrastructure over an assumed average 30 year period.
    “Consistent with the Financial Heads of Agreement signed in June 2010, the arrangements under the Definitive Agreements and associated Government policy commitments are expected to deliver approximately $11 billion in post-tax net present value over their long-term life,” an ASX statement on the deal reads.
    “This value will not be in the form of an upfront payment, but is the present value of payments to be received over many years. This value is also subject to a range of dependencies and assumptions over the life of the agreements.”
    The telco said it expected that the consideration for the disconnection of its relevant copper and HFC cable broadband services, as well as appropriate commercial terms for scale access to its infrastructure, together with benefits from associated Government policy commitments, would produce a net result superior to other options realistically available to the company.
    Yesterday federal opposition communications spokesperson, Malcolm Turnbull, said the agreements will make it more difficult to deliver its alternative broadband plan for Australia.

  • Telstra to build new Melbourne datacentre as part of cloud services push

    Telstra is set to build a new 2000-square metre datacentre in Melbourne as part of its $800 million, five-year Cloud services agenda announced this week.
    The expenditure will also include modernising the facilities at existing Telstra data centres in Sydney and Melbourne, expanding the telco’s enterprise applications, launching an online partner portal, and enhancing T-Suite software-as-a-service (SaaS) capabilities.
    Telstra's chief operations officer, Brendon Riley, said the company’s objective is to have the biggest network integration of Cloud in Australia.
    "We are now completing expansion of our Sydney datacentre facilities to accommodate our next generation data centre,” he said.
    “We also want to build a new state of the art data centre in Melbourne to support our expansion.
    “It will be of modular construction for maximum Green capabilities and I anticipate it will be commissioned in early 2013."
    According to Riley, the new Melbourne facility will increase its data centre capability by more than 40 per cent and provide Cloud requirements for "many years to come".
    "Cloud is not all about data centres, but they are important,” he said.
    “On top of that we are going to provision a highly scalable network.
    “We all want efficient and scalable infrastructure to adapt to the demands we have."
    To achieve the Cloud services, the telco has partnered with Cisco, VMware and Microsoft, while integration partner Accenture will build the next phase of its integrated Cloud platform.
    Telstra chief executive David Thodey said that while Cloud services were nothing new for the vendor – as the telco began offering T-Suite software-as-a-service (SaaS) in 2008 – the investments were made due to increasing customer demand.
    "We are also experiencing strong sales in our Cloud voice and video services, which are exceeding 80 per cent year and we now manage more than 100,000 IP telephony services delivered from the Cloud,” Thodey said.
    "With this Cloud computing platform we can provide Cloud services that are integrated into our networks, which means they are secure, monitored and can be accessed in more locations across the country."
    He also said that the company wanted to offer customer Cloud so they could focus on other areas of their business.
    "This is part of a bigger transition within Telstra from being not just an access provider, but a company capable of offering different services to SMEs, enterprise and corporations,” Thodey said.
    Telstra’s announcement has been brewing for a while, when in May 2011 its chief technology officer, Hugh Barlow, urged businesses to outsource their IT functions to Cloud operators in order to get with the 21st Century and reduce overall costs.
    Customers who have recently implemented Telstra's Cloud include Australian Vintage, Komatsu, the Salvation Army Employment Plus and Tabcorp.

  • Want to get 'old' CEOs into social media? Try success stories

    What do IT and marketing people do if their CEO and other senior managers are stultifying the use of social media? Show them case studies and examples of how other C-level executives are using it to their advantage, say leading social media professionals from Telstra and Facebook.

  • Cost of mobile broadband up to 1333 times fixed services

    The growing price gap between fixed and mobile broadband is emerging as a major telecommunications issue according to Market Clarity, which claims that mobile broadband can now be as much as 1333 times more expensive than fixed broadband on a per GB basis.

  • iiNet praises NBN Co, pans lack of digital economy strategy

    Internet service provider (ISP) iiNet (ASX:IIN) has praised the National Broadband Network (NBN) but has cautioned that the value of the fibre network will be lessened unless the Federal Government issues a national online strategy to give purpose and direction to the project.

  • Cisco unveils Internet TV and more at CES

    Cisco this week unveiled a suite of video products designed to combine digital TV, online content, social media and other communications applications into an all-inclusive home and mobile video session.

  • Australian comms minister dismisses talk of special NBN pricing

    Australian communications minister Stephen Conroy has dismissed concerns held by independent Senator Nick Xenophon that the current National Broadband Network (NBN) legislation may allow the NBN Co to offer special pricing to major players such as Telstra.
    During a media conference following the passing of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 today, Conroy hosed down suggestions that NBN Co would offer Telstra volume discounts on the NBN.
    “What is set out in that bill is that if the NBN want to give say a volume discount it has to go and get approval from the ACCC," he said. "The NBN can’t just go off and give a volume discount to anybody or make new pricing arrangements.
    “[NBN Co chief executive Mike] Quigley has said that the policy of the company is not to give volume discounts. So there is both Mr Quigley on the record and if you read the relevant legislation it is very specific: it can only be done if the ACCC gives it the tick.”
    According to Conroy, giving NBN Co the power to offer volume discounting was to provide a “degree of flexibility” in the legislation.
    “Let’s be clear: it has to be done with the ACCC’s approval,” he said. “This is a bill which will now work its way through all the committee stages.
    “We will listen to the committees, we will listen to the other members of parliament and we will consider that some time in the first half of next year but I imagine this will be at least a six-month process we are going through.”
    The comments follow a statement from Xenophon today that he would not be supporting the NBN legislation due to be voted on in the Senate in February because it currently allowed for a special deals for major telco providers.
    "Last week I voted for the structural separation of Telstra, because I believed it would increase competition and help consumers," he said. "But allowing for preferential pricing on the NBN for certain companies will hurt competition and in turn hurt consumers. I will not be supporting those Bills unless every provider gets the same deal, regardless of their size or power.”
    According to Xenophon, as the Telecommunications Legislation Amendment (National Broadband Network Measures – Access Arrangements) Bill 2010 currently stood, NBN Co is allowed to ignore non-discrimination measures if this aided efficiency".
    Xenophon also claimed the Explanatory Memorandum of the Bill gave scope for NBN Co to favour certain providers based on their size and the revenue they may provide.

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