Australia - wholesale ADSL2+

Telstra to sell broadband capacity wholesale

TELSTRA has opened its ADSL2+ broadband network to rival wholesale customers, but it won't be an open-door policy.

Late last week, a spokesman for Telstra's wholesale division confirmed the company had begun offering the broadband service to customers under wholesale agreements.

However, he said, it was only being offered to companies that met the carrier's "commercial criteria".

"Telstra will offer ADSL2+ to all wholesale customers that meet our commercial criteria," the spokesman said.

The decision ends a policy of locking Telstra rivals out of its ADSL2+ network for the past 18 months.

The policy angered rival internet service providers and drew criticism from the Howard government and regulators.

Telstra's major tier-two rivals in the internet market, Internode and iiNet, have welcomed the move.

IiNet chief technical officer Greg Bader said: "We think it's a great idea. They've got the capability and they've been sitting there not wanting to, so if they decide to offer it on a wholesale level we're more than happy to have a look at it."

Internode regulatory affairs manager John Lindsay said it was eager to receive an offer to resell Telstra's ADSL2+ service.

"We haven't to date received any sort of offer of ADSL2+ service but we're very keen to receive some sort of offer that we could order a service against," Mr Lindsay said.

Industry sources told The Australian that the service would only be offered to wholesale customers prepared to accept stricter commercial terms than those attached to its slower ADSL1 service.

Telstra's spokesman said: "the terms and conditions of any commercial offer are confidential but it's fair to say we are offering ADSL2+ to customers who wish to maintain a long-term commercial relationship with us".

"ADSL2+ is not a regulated product and we're able to sell it on our own terms.

"Offering ADSL2+ has nothing to do with fibre to the node - it's a commercial decision to offer ADSL2+ to Telstra wholesale customers - we have long-term commercially based relationships with many customers and we expect that to continue into the future."

Industry sources said that service providers wishing to resell Telstra's ADSL2+ service would be required to pay about $20 to $25 per connection and purchase backhaul valued in excess of $400 per megabyte per month for every 20 customers they signed up.

The final retail price of the service is expected be about $60 to $70 per month after service providers include their margin.

Service providers that are not prepared to buy Telstra's backhaul would be expected to pay about $35 to $40 per connection, the sources said.

"I'm intrigued that they are offering a long-term commitment to ADSL2+. I thought the whole idea of their FTTN was that they were going make all that technology go away," Mr Lindsay said.

It's not clear whether the service will be offered to service providers that have their own ADSL2+ infrastructure.

"If we look at who's selling it in six months time, that will be indicative of how ubiquitous Telstra's offer is.

"They have indicated to us that something is happening in that space but we haven't sat down and had an opportunity to go through the details," Mr Bader said.

Telstra began offering ADSL2+ services in November 2006 to compete with rivals including iiNet and Internode, which had begun offering it from their own DSLAM equipment.

The carrier limited its ADSL2+ service to exchange areas where it was already being offered by rivals, citing concerns that the Australian Competition and Consumer Commission would declare the service essential.

Telstra chief executive Sol Trujillo launched the ADSL2+ service across 900 exchanges serving about 2.4 million consumers at a ceremony in Canberra attended by Prime Minister Kevin Rudd and Communications Minister Senator Stephen Conroy.

At the time Telstra said it had opted to turn on the network after the ACCC wrote to Senator Conroy giving assurances it would not introduce rules to force the carrier resell it to rivals.

Critics said the company was trying to fend off moves to impose stronger business separation between Telstra's wholesale and networking businesses.