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TPG launches challenge to NBN

Australia’s No.2 fixed broadband operator, TPG will launch wholesale superfast broadband services this month, in competition with the NBN.

Announcing the move on 17 August, TPG said it was preparing to offer 25/5 Mbps and 100/40 Mbps wholesale services to some 1500 buildings across all mainland states.  As TPG’s Fibre-to-the-Basement (FTTB) roll-out has targeted multi-dwelling units, the actual number of potential customers will be several times that number.

TPG launched its FTTB service in 2013, exploiting a loop-hole in legislation designed to give the NBN a monopoly over the residential market.

The Turnbull government subsequently introduced a licence condition obliging TPG to offer access to its network on a wholesale basis through a separate vehicle. TPG has now complied by establishing FTTB Wholesale – a functionally separate but fully owned wing of TPG.

TPG’s targeted strategy will allow it to undercut nbn by a significant degree, at least in the first instance, as unlike nbn it is not obliged to provide national coverage.

While its wholesale access charges are at present the same as nbn’s ($27 a month), its usage charges are about 67% lower. This should be highly attractive to retailers for whom nbn capacity charges are currently a major concern.

It is still early days in the superfast broadband race. But with wireless operators, both fixed and mobile, also gearing up to offer services at gigabit speeds, the commercial challenges to the NBN seem set to increase sharply in the coming years.

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