Optus talks to government about NBN backhaul

“We are engaged with the government in terms of exchanging views on it,” says Optus exec.

Wireless towers and other mobile base stations rely on fast fibre connections for backhaul.

Wireless towers and other mobile base stations rely on fast fibre connections for backhaul.

Optus shares concerns about the high cost of backhaul for mobile services but is not ready to take a position on opening the NBN to mobile operators for that purpose, according to Optus chief country officer Kevin Russell.

Liberal MP Paul Fletcher has said that the Coalition government will consider opening the NBN for mobile backhaul.

“We are engaged with the government in terms of exchanging views on it,” Russell said on a media call after the telco announced its financial results for the quarter ended 30 September. “We obviously do have some concerns in terms of the cost of backhaul.”

Vodafone Hutchison Australia CEO Bill Morrow has taken a strong stance in favour of opening the NBN to Telstra competitors like Vodafone and Optus. Currently, the competitors must pay Telstra for backhaul for their mobile base stations.

Morrow has said opening the NBN for backhaul is critical to extending mobile coverage into remote areas.

“Put simply, you need fixed-line infrastructure to carry the voice and data traffic from the mobile network to the exchange and to the rest of the world,” Morrow said last week.

“However, the economics of building duplicate fixed and mobile infrastructure don’t stack up, leaving consumers in many areas with no choice. We need greater competition to create the market that delivers more coverage, better services and choice to consumers.”

Russell was more guarded about Optus’s view.

While others in the market are “vociferously” pushing for opening the NBN to backhaul, “we are understanding better what the opportunity would be and we’ll have more details going forward,” he said.

Russell otherwise declined to opine on on the state of the NBN following the election of the Coalition.

“We’ve been preparing for the opportunities presented by the National Broadband Network,” he said. “While it’s too early the future shape of an NBN, we look forward to work with the government and NBN Co following the strategic review that is currently under way.”

The government has commissioned a 60-day review of NBN Co, which will include analysis of the progress and cost of the NBN rollout and NBN Co’s financial and operational status. The review is due for submission to the government for consideration by December 2.

The government plans to detail its new plan in a statement of expectations that will be released after the review is completed. In late September, the Coalition issued an interim statement of expectations to provide construction and operating guidance to the NBN Co during the audit.

Optus has had “initial discussions” about the NBN but more comprehensive talks will happen after the review is finished in early December, Russell said.

“Our expectation is quite simple. We have an agreement in place. Our expectation is that that agreement will continue.”

This morning, Optus reported a 32.6 per cent rise in net profits this past quarter despite a 5 per cent decline in revenue. Recent job cuts and other cost-saving measures at Optus reduced operating expenses by $202 million.

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