Telstra is making millions of dollars selling internet...

Telstra is making millions of dollars selling internet connections in direct competition with the National Broadband Network but it is legally allowed to do so because it does not advertise them as an NBN “alternative”.
The nation’s biggest telco is also allegedly selling “backhaul” internet services to a Brisbane company accused of operating illegal shadow NBN networks in thousands of apartments.
The growth of mobile broadband and fixed wireless internet connections are set to wipe billions of dollars from the bottom line of NBN Co, as users take up increasingly ubiquitous and cheap competing technologies.
Telstra is offering “home wireless” internet packages that run off the telco’s mobile network, for $70 a month for a 40 gigabyte-per-month package and $150 a month for an 80GB connection.
“The home wireless network is connected via Telstra’s mobile network,” a Telstra spokesman said. “As such it is not an NBN product.’’
Soon after the NBN was announced in 2009, then-communications minister Stephen Conroy struck a deal with Telstra, preventing it from advertising products as “NBN alternatives” in a bid to protect the revenues of the $49 billion network.
Telstra is also offering home modems, the Telstra Gateway Frontier Modem, which can run on its mobile network — via an in-built SIM card — or a fixed Telstra internet connection.
That fixed internet connection can be either NBN, or ADSL if NBN is not connected.
The modem connects to either source and emits wi-fi.
A 2000GB connection costs $99 a month and there are no restrictions on how much of that data is drawn from the Telstra mobile connection.
A Telstra spokesman said Gateway Frontier packages costing $99 and up would soon offer limitless downloads.
Telco analyst Ian Martin of New Street Research said the Gateway Frontier modem was an example of the challenges NBN Co faces as more people switch to mobile broadband-capable devices.
He said at least 17 per cent of internet users bypassed the NBN by using mobile broadband devices and fixed wireless connections — up on the 15 per cent originally forecast by NBN Co — and that figure was likely to grow to about 25 per cent over the next five or six years.
That not only meant NBN Co would have fewer subscribers, but it would be forced to lower its prices to compete, which would likely force it into large writedowns.
As previously revealed by The Australian, some internet network providers are installing “shadow” networks in apartment towers where NBN networks already exist, in alleged contravention of the law.
One of the biggest operators of shadow networks, the Brisbane-based MyPort, has been buying “backhaul” internet connections from Telstra, according to OPENetworks, a rival internet network provider.
A Telstra spokesman said MyPort “does not buy any services direct from Telstra Wholesale”.
OPENetworks has provided The Australian with photos showing Telstra connections linked to a shadow network installed by MyPort in South Brisbane apartment tower Soda Apartments.
MyPort has said it is “fully compliant with all laws”.