Reports have surfaced that Telstra has been testing fibre-to-the-basement (FTTB) network technology, which it may use to compete against the NBN.

This comes as a result of telecom provider TPG announcing its own fibre-to-the-basement network, using a ­regulatory loophole to expand its established network to connect ­apartment buildings.

Telstra chief executive David Thodey reportedly told the Australian Financial Review that Telstra would be ready to offer its own fibre-to-the-basement network, offering speeds of up to 100 megabits a second, if TPG was allowed to go ahead with their plan.

Such a move could undermine the NBN Co’s profitability and its ability to make back its investment by signing up some of the company’s most lucrative potential customers in densely populated urban areas. The money generated by these customers is required to provide NBN connection to more regional areas, which cost more to connect.

Mr Thodney also told the AFR that the government would have to close the loophole if it intended to continue its original plan of allowing no infrastructure-based competition, and that the issue had to be cleared up before Telstra could agree to a new version of the $11 billion deal being renegotiated with NBN Co for access to its copper networks. 

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