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Comment by roenxi | Hacker News Reader

Telstra's major asset is a large copper telecommunications network. The government, as a matter of policy, is tearing that network up and replacing it with a publicly owned fiber network. This is not a great situation for Telstra, to say the least.

This has been going on for a while, but a hazy memory suggests there have been shenanigans afoot regarding cash compensation for the damage done - that could cause all sorts of gyrations in the share price. At any rate, the market has become so political I wouldn't read too much in to Telstra's share price without having a detailed understanding of the situation. The board is not in control of the political process.

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Your assessment isn't correct at all.

Telstra sold the copper network to NBN in 2014. And NBN isn't replacing that network at all. They are still using it for FTTC, FTTN and FTTB which will make up the large bulk of the NBN rollout along with HFC which they acquired from Optus.

And it's widely known in the industry that Telstra is positioning itself to potentially buy back the NBN given they recently split the company into two: Retail and Operations.

Forgive me if I have any misconceptions or out-of-date knowledge, but while Testra owned the copper telephone network (including, I believe, the copper cabling within everybody's houses), it's only FTTN that uses the traditional copper network -- as it uses copper cabling between the premises and the node (with the node being those above-ground grey pillar box in every suburb, I believe).

FTTC and FTTB don't use the much of the copper network at all: the only copper cabling in FTTC is between the end-user's premises and the small underground pit on every block (a very short stretch for vectored VDSL2 signals at 100 Mbit/s duplex). FTTB is fibre optic cabling to an apartment building, so the only copper cabling there is within the building.

(Side note: From my past research, FTTC with vectored VDSL2 seemed like a great cost-effective technology: leveraging a small amount of pre-existing copper cabling to save digging up every garden in Australia to install the final few meters fibre-optic cabling, with the optional upgrade path to full FTTP being allowed to be done at any time into the future, if a households willing to pay for the upgrade.)

I can't remember where Telstra's ownership stopped whether it was to the first in-house socket or to the curb. It's all a bit irrelevant now as NBN owns the network and its problems.

Because what NBN is finding is that the last bit of copper is actually responsible for a lot of the problems. And so even though FTTC for example should be seeing significantly better results than FTTN in fact it isn't the case. So much so that NBN is looking at whether to go into people's houses to fix up the wiring.

FTTC is definitely a better option than FTTN especially since with G.Fast you are able to attain 1Gbit/s speeds.

> I can't remember where Telstra's ownership stopped whether it was to the first in-house socket or to the curb.

It's at the Network Boundary Point (NBP), which varies from premises to premises.

Free-standing houses that are more than 5-10 years old, it'll probably be the first socket. For newer houses, there's a NBP that's either on the side of the house, or near the edge of the property.

For Strata / Multiple-Dwelling Properties, it may be a Distribution Frame.

Way back in the 90s, before Telecom Australia became Telstra, the ownership of all the internal wiring (defined as anything from the NBP onwards) was transferred to the owner of the premises. This was part of the competition stuff - allowing competitive bids on builds for wiring new premises, business, etc.

> Telstra sold the copper network to NBN in 2014.

Yeah, hence the big cash payout. 2014 is associated with the peak share price by 1-2 years, so they might have been given a big cash infusion, share price jumps, returned it to the shareholders slowly over a couple of years because they specialise in network maintenance which is no longer a competitive advantage.

> They are still using it for FTTC, FTTN and FTTB which will make up the large bulk of the NBN rollout along with HFC which they acquired from Optus.

My parents house was connected to the NBN, their copper landline was disconnected, as was everyone on their street (they had no choice in the matter). And FTTC, FTTN and FTTB all involve ripping a lot of copper out of the ground to be replaced by fiber.

Shenanigans is an understatement. The government "compensated" Telstra for giving up it's network monopoly and after dropping Labor's plan of fiber to the property for existing connections bought the copper network anyway so Telstra double dipped.

I've already had my NBN connection out for a whole week due to a failure in the copper.

So previously a private company monopolized the business and now government would monopolize it. I wonder which one is the worse...

The private company one is worse

The private company was privatised after previously being a government run organisaion. They floated it to get a bunch of income, but the nature of large infrastructure is that it's incredibly costly to build a new network. Thus, Telstra simultaneously acted as a private company (trying to deliver returns to shareholders) whilst being this sort of Frankenstein's monster of regulated wholesale monopoly, which hamstrung Australian broadband development something incredible.

What many people don't know as well was that Telstra was subject to a Structural Separation Undertaking which meant that their Operations arm of the business would treat their Retail arm as like a seperate company. Otherwise it would be unfair for competitors.

Except that this was routinely broken meaning the entire telecommunications market was constantly distorted. It really was the worst of all worlds.

It's been an issue long before the NBN. Even after the dot-com bust, through the ADSL roll-out era where their wholesale arm had a stranglehold on the network, plus the high speed cable network from Foxtel, they've consistently mismanaged themselves and failed to deliver for shareholders despite their incredible advantages relative to other players.

For example, the T2 float in 1999 was done at about $7.50. It took until about 2014 for the dividend yields to stack up enough that when combined with the share price, T2 shareholders could break even in nominal (not real) terms.

Telstra's management, given its position of advantage in the Aussie telco industry, has been a shambles for a lot longer than the NBN.

I just want to chime in here to say: when I recently tried to purchase an iPhone SE from Telstra's online store, the device was out of stock. They couldn't tell me when they expected to have it back in stock, or it was being end-of-lifed. No straight answers.

I spent 15 hours, over two weeks, on the phone to Telstra trying to get the order cancelled and my money back. I gave up with that.

And went in to a Telstra owned Telstra store and politely but sternly demanded my money back by asking the managed to call his escalation point(s) until he found someone who could authorise the return of my money.

After half an hour he was asking me to leave and I repeatedly said "not until I have my money back". I wasn't being threatening at all, rather I was pleading with him to understand my position.

He picked up his mobile and said he was dialling the police.

That's how Telstra treats it's customers.

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