Analysts comment on G9 scheme
Leading investment analysts comment on the G9 scheme and Telstra's FTTN proposal.
Citigroup
Discussing prospects for a new two-stage Government process:
- Telstra has an inherent advantage in any FTTN tender. (5 June 2007)
Getting a seat at the table:
- The extent of regulatory and legislative change required to meet the latest Fibre to the Node proposal from Telstra's competitors, known as the G9, is "Ben-Hur"-like in scope. Is it the G9 or G5 with only five shareholders excluding Optus? (31 May 2007)
JP Morgan
- G9 has very limited legal avenues to enforce their plan. (1 June 2007)
- We believe that the Government is unlikely to drive the regulatory changes required by the G9 plan as we believe it would face the prospect of a lengthy court battle with Telstra. (1 June 2007)
Deutsche Bank
- We maintain our view that the Telstra proposal is a more plausible option as it can be implemented rapidly (brownfield not greenfield ), lower deployment cost (use ~11,000 existing pillars), wider reach (includes regional towns) and broader community support (Telstra's 48,000 employees + retail shareholders), an important consideration in an election year. (31 May 2007)
Macquarie Bank
- Still significant hurdles that the G9 will have to clear before its FTTN proposal becomes viable. (31 May 2007)
- Our view is still that Telstra will be the eventual builder of an FTTN network, and that a ‘carrot’ will be provided to improve the economics that do not stack up, given the opportunity cost for TLS of moving to the new network (ie giving up its copper network returns). (31 May 2007)
ABN Amro
- Without some co-operation from - or coercion of - Telstra on network access points and access to ducts and rights of way, a G9 roll-out would be long, slow and costly. (3 May 2007)
- The G9 plan also requires legislation to prevent overbuild. It's unlikely the Government would provide this. (3 May 2007)
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Authorised by L McGregor, Telstra Corporation Limited, Melbourne, VIC 3000