Australian Financial Review

Primus Telecommunications expands operations

Australian Financial Review - Thursday, September 13, 2007
by Tracy Lee

Internet service provider Primus has made a significant investment to increase the speed on its fibre-optic network in a move that signals its confidence that Telstra will not gain the approvals needed to build a broadband network that would strand its competitor's equipment.

Primus will upgrade its network speed by 10 times to offer customers speeds as high as 10 gigabits per second.

Chief executive Ravi Bhatia said the investment was "material" and that it was made in response to customer demand for greater broadband capacity.

He said increasing use of internet for video from sites such as YouTube, song and movie downloads was driving the hunger for increased speed.

"It's basically video and peer-to-peer technologies that's driving all this," he told The Australian Financial Review yesterday.

"The data usage is growing at almost astronomical levels [and] to make sure users have the proper experience, we have to expand [our network]."

The major upgrade will focus on the five capital cities of Brisbane, Sydney, Melbourne, Adelaide and Perth and will be progressively rolled out to other centres.

The move by Primus comes as Telstra formally launched an upgrade to its hybrid-fibre coax cable network from 17 megabits per second to 30mbps. The HFC cable typically carries Telstra's Foxtel feed but is also capable of delivering broadband services

Telstra yesterday switched on its improved consumer cable broadband that will be available to 1.8 million Sydney and Melbourne homes and businesses.

But Mr. Bhatia said the move by Telstra only served to reinforce his suspicion that the sector incumbent was not wedded to rolling out a national high-speed fibre broadband network.

"I'm surprised that Telstra took such a long time to come up with higher HFC speeds," he said.

"It just goes to show they were trying to bamboozle people into agreeing to an exclusive fibre-to-the-node [rollout], but when they didn't get that, they went down the HFC route.

"It says FTTN is not necessary."

Telstra and a consortium of rival telecommunications companies have been vying to build the country's first FTTN network.

The federal government has asked an expert panel to assess interest in the project and to draw guidelines under which interested parties must tender for the project.

Reprinted from the Australian Financial Review.

For more information on Primus, view the latest press releases.