Smith Ltd is a utility company that owns a large cable connecting Melbourne to Singapore. Bob Ltd (customer) and Smith Ltd (supplier) enter into a 6-year contract which gives Bob Ltd the right to use a specified amount of capacity within a cable owned by Smith Ltd. The specified amount of capacity is equivalent to the full capacity of three fibre strands within the cable. The transmission of data follows a pre-determined schedule, but Smith Ltd makes decisions about which fibres are used to transmit Bob Ltds traffic. If the fibres are damaged, Smith Ltd is responsible for the repairs and maintenance. Smith Ltd is obliged to substitute the fibres for reasons of repairs, maintenance or malfunction.

Required: Based on AASB 16 Leases, analyse whether the above contract should be treated as a lease contract.