NBN Co's buys iiNet's FTTH network

The purchase follows threats from iiNet to NBN Co to buy its FTTH network or face competition

NBN Co has bought iiNet’s fibre-to-the-home (FTTH) network in the ACT for $9 million in cash.

Last year iiNet laid down the gauntlet to NBN Co, stating NBN Co needed to buy out iiNet's fibre and HFC networks or be prepared for competition from the ISP.

The TransACT network covers around 8500 premises, with construction underway on another 4500 premises.

iiNet will receive an “additional equivalent per premise consideration” for the premises under construction for FTTH as they are passed or connected.

TransACT customers will have equipment swapped when they order an NBN-enabled service through an RSP.

“This is a good deal for iiNet, for NBN Co and for residents passed by the TransACT network in the ACT. For our part, it brings forward NBN Co’s ability to earn revenues, reduces construction costs and limits community disruption,” Mike Quigley, NBN Co CEO, said in a statement.

TransACT will continue to carry out construction of pit and pipe infrastructure for its FTTH network in some new housing estates under agreements which last until 2017.

Ownership of the infrastructure will be transferred to NBN Co at no extra charge to the government-owned company.

NBN Co will also be able to access further underground duct infrastructure in the ACT under the agreement.

“This agreement means that TransACT’s FTTP customers will soon be able to experience the benefits that come from being on the NBN,” Michael Malone, chief executive officer at iiNet, said in a statement.

“We’ll be communicating with our FTTP customers throughout the process to ensure a smooth transition over the next 12 months.”

iiNet acquired TransACT in 2011 for $60 million. Last year iiNet boasted that it had more customers connected to its FTTH network than NBN Co had connected to the NBN.

The agreement between iiNet and NBN Co is subject to ACCC clearance and is expected to be completed in the next two months.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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Tags nbn coiiNetNational Broadband Network (NBN)fibre-to-the-home (FTTH)

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