Optus has flagged plans to aggregate and on-sell wholesale fibre, wireless and satellite services under the National Broadband Network (NBN) as a virtual ISP, as part of an attempt to maintain the viability of its fixed wholesale division into the future.
Optus wholesale and satellite managing director, Vicki Brady, this week confirmed talks with NBN wholesaler NBN Co to on-board existing customers also included discussions around aggregation and reselling services by members of the number two telco’s wholesale division.
“We will be there selling backhaul to the NBN points of interconnect to those who want to deal direct with NBN Co and we will also be launching a virtual ISP service that combines these and other capabilities to make selling NBN services as easy as desired by our customers,” Brady told attendees of the Commsday Summit in Sydney this week.
The virtual ISP service, one of many Brady believed would become available under the NBN, would aggregate backhaul and connectivity to customers together as well as either technical features, on-selling them to retail service providers.
Although existing service providers would likely deal with NBN Co directly rather than through an aggregator, Optus’ planned virtual wholesale service would deal more with a potential fixed wholesale counterpart for the MVNO market currently expanding on the telco’s mobile network.
According to Brady, the introduction of non-traditional telco players like Woolworths and Flexirent - as well as telco challenger brands Amaysim and Tru to the market - had grown the proportion of wholesale partners to 10 per cent of Optus’ overall mobile use, up from eight per cent in 2009.
“But all of this innovation is perhaps a dress rehearsal for the future,” she said. “Perhaps the most destructive change ever to happen in the Australian wholesale market is just around the corner: The NBN.”
It is expected non-telco retailers, like Woolworths among health and education verticals, will seek to become service providers in their own right under the NBN, providing either basic broadband access or niche services such as IPTV and e-health functionality.
However, NBN Co’s mandate to only provide Layer 2 wholesale services would require the potential retailers from investing heavily in network infrastructure capable of delivering those services directly to end-users; a gap Optus hopes to fill.
Brady conceded the fixed wholesale market would likely diminish under the NBN, despite best efforts by the Australian Competition and Consumer Commission to maximise wholesale competition in its points of interconnect discussions with NBN Co.
Should the $9 billion financial heads of agreement between Telstra and NBN Co be approved later this year, the incumbent telco will subsequently remove and migrate its cable broadband customers over to the fibre network.
Optus is itself in talks with NBN Co around a potentially similar deal for its own cable broadband subscribers, further diminishing the company’s fixed infrastructure portfolio.
Though the company has continued to boost standards and speeds on its existing cable network, Brady said the majority of the $5 billion spent on infrastructure improvements in 2005 had been spent on the mobile network.
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