11 September 2007

In what could be called little more than a "we'll-get-back-to-you" place-marker, Deutsche Telekom’s Asian office has expressed possible interest in building the fibre-to-the-node (FTTN) network for Australia.

In a 2-page submission to the Government’s FTTN Taskforce, Deutsche Telekom claims:

• sufficient expertise to do the job
• confidence they can get private sector funding
• agreement with the objectives of an open competitive FTTN network

BUT, they also express some reservations & provisos:

• they flagged the need for "targeted subsidies" if the desired coverage is outside "normal" economic models
• they are critical of the time frames for the process
• want clarity regarding the ongoing role of the ACCC
• want a regulated pricing model as a given

Telstra's CEO, Sol Trujillo, said he is unfazed by the prospect of competition from Deutsche Telekom.

Asked whether he was concerned about Deutsche Telekom's potential entry into the
fibre-optic fray, Mr Trujillo said: "The simple answer is, no."

"The economics of somebody building, somebody having networks, somebody not having people, not having trucks, not having all of that ... it is a challenge for anybody," he told reporters at the Merrill Lynch Australia investment conference in New York last week.

Ironically, in its German homeland Deutsche Telekom, Europe's biggest telco, has enjoyed the support of its government and forbearance from its regulator in order to roll-out FTTN. Even in the face of strident criticism from the European regulator, the German government has backed Deutsche Telekom and seems to understand the benefit of having a strong domestic telecommunications industry and the need to encourage local investment in fibre-based technologies.

In stark contrast, in Australia the Government and regulators put roadblocks in the way of the incumbent carrier's plans to invest in FTTN, rather than encourage it.

Deutsche Telekom's 2-page Submission to the FTTN Taskforce (www.dcita.gov.au)

Related media coverage:

• Deutsche Telekom makes three in broadband race (www.smh.com.au)
• Trujillo not fazed by European competition (www.news.com.au)

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