Spend-up to put TelstraClear in the loop

TelstraClear chief executive Allan Freeth. Photo / Greg Bowker

TelstraClear has unveiled a multi-million-dollar technology spend-up aimed at connecting thousands of customers to its own network before the Government's fibre roll-out.

The local arm of Australian telco giant Telstra is putting its equipment into telephone exchanges, known as local loop unbundling, at a cost of around $25 million.

TelstraClear chief executive Allan Freeth is confident the speeds and capacity the company can deliver over its network will meet consumer demand in the face of competition from a Government-backed fibre-to-the-home broadband network.

"Fibre-to-the-premise and -the-home is the promise of tomorrow. We're talking about the reality of today," Freeth said.

"We're not at all concerned about the issues of competition with local fibre companies because we believe this network is particularly well-placed to win customers in new areas."

Freeth said TelstraClear would look to team up with local infrastructure players and provide services over the Government-funded network in areas it didn't own existing infrastructure.

The investment will be its single biggest network expansion in nearly 10 years and the biggest unbundling programme by any telco to date.

As of this week 220,000 customers connected to 23 exchanges in Auckland and 19 exchanges in other urban areas will be able to link to TelstraClear's own exchange equipment, allowing the company to reduce its dependence on wholesaling Telecom's copper-based broadband and phone services.

A further 20 exchanges will be added later in the year with seven additional exchanges under consideration.

While Freeth wouldn't confirm what the return of investment timeframe was, he did say former Telstra chief executive Sol Trujillo was pleased with the plans when he okayed the investment.

TelstraClear has released a new suite of pricing plans on the back of the unbundling, starting at between $79 and $84 for a basic phone and broadband package. Broadband speeds would not be "throttled" at peak times.

TelstraClear said the unbundling would almost double its network, made up mainly of cable network in Wellington, Kapiti and Christchurch.

The move comes more than a year after competitors Vodafone and Orcon took advantage of law changes in late 2007 that opened up access to Telecom's exchanges.

Competitors Vodafone last year unbundled exchanges in Auckland to create its "Red Network", signing up phone and internet company Slingshot as a wholesale customer.

At the time Vodafone said it would expand the unbundling programme to other main centres but the number of unbundled exchanges still stands at 40.

Orcon is continuing with its unbundling programme - it is now in 36 Auckland exchanges and two in Wellington - with six exchanges currently under construction.

THE ROLLOUT
* 23 exchanges in Auckland, 19 in other areas from Invercargill to Hamilton.
* 220,000 customers can hook up to TelstraClear equipment.
* Around $25 million spent.
* 80,000 working hours logged by 200 TelstraClear staff.
* Five days to activate a new customer over a new automated system, down from 27 days.