iiNet reaches deal with NBN Co

Perth-based iiNet has side- stepped a costly battle with NBN Co, revealing it had signed up to the Federal Government-controlled company's crucial wholesale broadband agreement.

An iiNet spokesman confirmed yesterday the internet provider had reached a "mutually acceptable agreement" with NBN Co before the March deadline, avoiding a stoush that could have locked its customers out of the future NBN rollout.

The wholesale broadband agreement, now in place for the next two years, is the contractual vehicle that NBN Co uses to supply its products and services to customers such as iiNet, Telstra and Optus.

iiNet made headlines in January when it refused to sign up , describing it as a breeding ground for bad service.

The company took particular umbrage with the fact NBN did not have to pay for missing appointments to connect iiNet customers to the network.

The iiNet spokesman would not reveal the circumstances behind settling the dispute, only indicating the company had reached an agreement that would "benefit its customers".

However, it is understood iiNet had always planned to sign the agreement but was using the looming deadline as leverage to reach a more favourable deal.

iiNet currently has about 25,000 NBN customers across the country and services about half of the WA homes connected to the service. It sees the NBN rollout as a major part of its future strategy.

The $41 billion NBN, the biggest infrastructure project in Australia's history, has so far signed up only 11,329 WA customers, most in Victoria Park, Mandurah and Geraldton.

The service has "passed" 31,857 homes. Of those 11,329 signed up, 5540 mostly remote homeowners have signed up to the at-capacity satellite service.