Telstra to cease copper network construction ahead of NBN, but property prices set to rise

Telstra’s decision to cease installing copper phone lines will force huge delays in housing development and drive up the price for home owners.

Telstra says it will immediately stop installing copper phone connections in greenfields developments in response to a Federal Government directive for fibre optic cable in new housing from July 1.

Last week Stephen Conroy introduced legislation into the Senate requiring all developments that receive planning approval from July 1 this year to have capacity for high speed cabling.

The bill says that without such action, developers may choose the cheaper less capable copper option instead of fibre to the premises.

However, the property industry wants the Rudd Government to delay the proposed laws, claiming it will cause delays and confusion in an industry already plagued by under supply.

Stephen Albin, the head of the Urban Development Institute of Australia in NSW, says the decision surprised developers and will have a negative impact on the industry.

He says that renegotiating contracts with Telstra to install fibre could take up to eight weeks and there could be additional costs. “People are mentioning $3,000 per home,’ he says. Any additional cost would have to be borne by the developer until the sale is made.

Albin says while the additional cost will be absorbed into the overall price, every increase adds up.

“Everyone keeps adding to the cost of development projects and the price can rise significantly,” he says.

He says that Telstra has indicated it will negotiate separately with individual developers.

While Telstra dominates the supply of copper, there are other providers in the fibre market.

“But it is still negotiating with a gun at your head because there is no cash coming in with this delay.”