Competition watchdog to approve $800m deal to switch Optus customers over to NBN.
The Competition and Consumer Commission (ACCC) has issued a draft determination proposing to authorise the major agreement between NBN Co and Optus for the migration of the telco’s 400,000 hybrid coaxial cable (HFC) customers to the NBN and decommissioning of parts of its network.
The deal if it goes ahead, is worth $800m to Optus, similar to the one penned with Telstra earlier this year.
The main public benefits of the agreement are “clear and quantifiable,” the ACCC said in a statement, and will avoid the cost of operating Optus’ HFC network which provides a service which the faster speed NBN can already provide, and means lower costs for HFC subscriber migration to the NBN.
“The ACCC acknowledges that this draft determination represents a finely balanced decision, drawing on public information and submissions and a large amount of confidential information provided by NBN Co and Optus,” Chairman Rod Sims said.
The HFC Agreement removes a “potentially significant” fixed line competitor to the NBN in Brisbane, Sydney and Melbourne and competitive pressure from the Optus network may have prompted NBN Co to improve its performance.
“Optus is unlikely to undertake the large investment required to offer significantly faster products on the HFC network than those currently available” and is “unlikely” to be extended beyond the current 1.4 m homes, limiting the potential for its subscriber base to grow beyond its current 400, 000 users, the ACCC noted.
Optus HFC network would only provide a “close substitute” to the NBN for customers seeking broadband services that will be at the lower end of the range of services that the NBN will support, Sims also noted.
Minister for Broadband, Senator Stephen Conroy, welcomed the draft decision by the ACCC.
“The agreement between Optus and NBN Co provides the opportunity for Optus’s current HFC broadband customers to gain the full benefit of the National Broadband Network,” Senator Conroy said.
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