SYDNEY, 25 NOVEMBER 2008 - Bids for Australia's National Broadband Network (NBN) are in and the tender is closed, signalling the end of the year-long battle that has seen vicious fighting between contenders and harsh criticism of the government's broadband policies.
The fate of the A$4.7 billion (US$3 billion) NBN is in the hands of communications Minister Stephen Conroy who will pick a winner from one of four contenders including Telstra, the Terria consortium led by Optus-SingTel, the Victorian Acacia group led by businessmen Doug Shears and Solomon Lew, and Canadian network wholesaler Axia NetMedia.
All eyes will be on Telstra to see if it adheres to its promise to boycott the tender now that the government has not ruled out structural separation. The company's media department would not confirm if it has lodged its prepared bid, and told Computerworld Telstra will be making an announcement soon."
State-based NBN bids include Acacia for Victoria, Aurora Energy for Tasmania, and Transact for the ACT. The governments of Tasmania and South Australia will bid for their respective states.
Axia NetMedia has an equal stake in Singapore's national fibre network which is owned by Optus parent company SingTel.
Conroy told a recent meeting at the American Chamber of Commerce the NBN process would have been hindered if regulatory policy was decided beforehand. "Our view, as I have stated previously, is that prescribing specific regulatory settings at the start of this process would have unnecessarily narrowed the scope for innovation and competitive tension," Conroy said.
"When we put $4.7 billion on the table to invest, we anticipated, and encouraged this debate. It is fair to say that we have not been disappointed. "But the government is focused on outcomes in the NBN process, not regulatory totems."
No date has been set by the government for the announcement of the winning bid.
Telstra hits ball into Government's court
By lodging a short, non-compliant bid, Telstra has kept itself in the running for the Government's funding, but at the same time has kept its options open, said David Kennedy, Research Director at Ovum.
We see this bid as an invitation to the Government to sit down with Telstra and negotiate a deal that will achieve the Government's political goals while meeting Telstra's commercial criteria.
Telstra's desire to negotiate at senior levels', meaning the Minister Conroy and the Prime Minister, attests to this.
By preserving pricing for entry-level telephone and broadband services, and offering new wholesale services, Telstra is trying to deflect concerns about its market power. It hopes this will make the offer of negotiation more attractive.
The real question is, what next? said Mr Kennedy. It's hard to see the other bids being competitive against the strength of Telstra's financial and technical capabilities in the current economic climate.
If the Government isn't satisfied with the other bids, it will be forced back to the negotiations with Telstra. That would put us back right where we were in late 2005, when Telstra first announced it wanted to build a FTTN broadband network.
Optus takeover of Terria realistic
The Optus takeover of the Terria proposal is a realistic step. Optus is the only Terria partner with any access to significant investment capital. Reality has kicked in, said Mr Kennedy
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