Oz extends deadline for fibre bids

James Middleton

May 23, 2008

3 Min Read
Oz extends deadline for fibre bids

The Australian government has extended the deadline for bids to build a national fibre network alleviating concerns from parties interested in the project.

Minister for Broadband, Communications and the Digital Economy, Stephen Conroy, said Thursday that parties participating in the National Broadband Network process would have 12 weeks to consider network information from the date all material is made available.

Carriers had complained that the original process unfairly benefited incumbent Telstra because of a tight deadline and the fact that Telstra had not released all the information necessary to cost such a rollout.

“Telstra has provided some network information however despite its best efforts some information is not yet available,” Conroy said. “The provision of network information is vital to allow potential proponents to build the network to compete on an equal basis.”

David Kennedy, research director for industry analyst Ovum, welcomed the move but said he was not surprised that the government is extending time for the tender process, “Because this is a very complex project.

“If anything, the Government has been pushing too hard to meet a political timetable. This is an important and complex decision, and shouldn’t be rushed. This latest extension will improve the quality of bids and the competitiveness of the tender.”

Kennedy expects the network will take around four years to build, and it will be used for decades. Telstra, Australia’s Macquarie Bank, and the G9 consortium led by SingTel Optus – now known as Terria – are all understood to have tabled a bid. Optus has also filed a solo bid in case it decides to proceed without the backing of a consortium.

The proposed national FTTN network, is expected to deliver speeds of at least 12Mbps to 98 per cent of Australian homes. The government is planning to provide about A$4.7bn in funding for the network, with the balance to be provided by the winner of the tender. The total price was originally expected to extend to about A$8bn, but Telstra CEO Sol Trujillo recently commented that a A$14bn price tag now seems more likely.

As Ovum points out, the Australian population is highly urbanised, but there is a ‘long tail’ of towns and settlements that will be very expensive to provide with fixed broadband, and it certainly amounts to more than 2 per cent of the population.

“The proposed level of investment and the project’s objectives don’t seem to add up,” said Kennedy, who believes the government will be put in a tricky situation. Australia could either increase the level of public funding or allow the operator to jack up prices in rural areas – both politically dangerous moves. Or it could accept that total fixed line coverage might not be possible and look at wireless broadband instead.

In this event it’s a shame that the government recently pulled the plug on plans to roll out broadband to underserved and rural parts of Australia using WiMAX. So Kennedy believes the alternative is to make sure there is plenty of backhaul available for proposed 3G HSPA deployments.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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