Telstra is hoping the Optus deal will be a model for other ISPs.
The telco announced on Thursday it was getting into the Optuss broadband business.
“This is an investment in the future, not just a quick fix for a moment,” Telstra CEO Mark Scott said.
The deal will see Optus build a fibre optic network in the western suburbs of Melbourne and the west coast.
The network will be paid for through a 3.5 per cent Telstra commission.
It will cost about $2.4 billion.
It includes the purchase of a $1.6 billion cable and satellite television network.
The Optuss deal is the latest in a string of mergers by telcos in the telecommunications sector.
Optus owns a majority stake in Telstra, which owns Optus, and the two companies are also in the business of building broadband networks in the US and in China.
Telstra will be the company’s main commercial competitor in the market.
Optus will continue to offer its existing network to the majority of its customers.
The company says it is committed to supporting existing Telstra customers, and will invest in new services.
The company’s Optuss network will include more than 300,000 premises, about 50,000 of which are expected to be connected to the new fibre optic broadband network.
Optuss chief executive Tony Goss said the network was being built to “deliver the best in broadband services and services that deliver the best experience for customers, the environment and the community”.
“The Optus network is the most advanced in the country, and is in high demand across the country,” he said.
“As Optus is a leading provider of the highest-quality broadband services in the world, it is our strong belief that the Optuses Optuss fibre optic networks will deliver a more competitive and competitively priced network, delivering the best network for the customers, customers, their families and their communities.”
The Optens will also be able to sell their existing copper and fibre network to NBNCo for $200 per premises.
It will be possible for Telstra to buy back Optus’s existing network from Optuss, which will have to be refurbished.
Optus is also expected to buy the Optens network from NBNCo.
Telstra’s chief financial officer, Andrew Pringle, said the company was “very pleased” with the deal.
“Optus’ investments in the Opts network will give our customers and the Australian community access to the best broadband services available, including more than 200,000 more premises, and a better value for money for consumers and investors,” Mr Pringle said.
He said Optus was also looking at opportunities for Optus to invest in additional infrastructure to expand the network.
Mr Pringle added that Optus had not taken any of the existing Optus customers for a free ride.
“Optuses Optus Optuss Optuss is going to be a great network and it will be in the best shape in the industry,” he told the ABC.
“We’re not going to take any of our customers for free and we’re not taking any of their existing customers for an easy ride.
Optuses’ Optuss Network is going be a better network than any other network we have in the sector.”
Topics:communications,internet-technology,broadband,telstra-mpneto,melbourne-3000,vic,aus,qld
