While the latest round of redundancies in Telstra has been accompanied by a reduction in the use of contractors in many parts of the business, it is evidently a different story when it comes to NBN installations.
Here sub-contracting is evidently about to increase.
The Australian of 15 December reports that Telstra will spend some $3 million to create a new “army” of 250 technicians to install Telstra connections to the NBN as the roll-out gathers pace over the coming years. The aim is to sign up as many as 1 million customers during 2018 when the cut-over rate should be rising sharply.
But the new recruits won’t be direct Telstra employees. Instead they’ll be sub-contractors engaged by Telstra lead contractor, ISGM. And of course they’ll be paid on piece rates i.e. per installation.
Telstra has only recently renewed its contract with ISGM, engaging it for a further 10 years to deliver installation and maintenance services. It remains unclear what proportion of any future NBN maintenance work which Telstra might win might be covered by this contract.
What is clear, however, it that both Telstra and ISGM intend to have these 250 new workers, and others like them, carry the risks that are inherent in the NBN project, particularly in relation to workflow – risks that have already spelled financial disaster for sub-contractors and prime contractors alike.