Telstra ‘excluded itself’ from NBN: Conroy

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Telstra ‘excluded itself’ from NBN: Conroy

Broadband Minister Stephen Conroy has officially shut the gate on Telstra’s NBN proposal, saying the incumbent ‘excluded itself’ by failing to submit ‘one of five mandatory requirements of the RFP’.

It comes as calls are made for an investigation into whether Telstra has breached ASX and ASIC disclosure rules.

In a lengthy statement, Conroy described how the proposal was non-compliant with the RFP rules, effectively confirming an intense three weeks of speculation that Telstra would not be considered for the up to $15 billion project.

The Minister also confirmed that unlike Telstra, Acacia, Axia, Optus-Terria, TransACT and the Tasmanian Government have all met the requirements and conditions for participation.

The mandatory requirements, said to be outlined in sections 10.8 and 10.9 of the RFP, include that proposals are written in English, Australian legal units of measurement are used, that they include a complete and signed Proponent’s Declaration, that proposals for more than one State or Territory include a proposal for all States and Territories, and that the inclusion of an SME plan is ‘the condition for participation’, according to Conroy.

Clause 1.5.32 of the RFP also explicitly states: “It is a condition for participation in this process that Proponents submit a plan outlining opportunities for Australian and New Zealand SMEs to provide goods and services to the project”, Conroy said.

“The RFP was specifically designed to give proponents flexibility in preparing their proposals, and there are very few mandatory requirements,” Conroy said.

“There was nothing to stop Telstra from submitting a complete proposal and competing vigorously with other proponents in this process.

“Industry was offered the chance to compete on a level playing field under the RFP. However, the Telstra Board sought special treatment by proposing its own process,” said Conroy.

“The rules for the NBN process were set down eight months ago. The rules are publicly available and are exactly the same for all parties.”

Conroy said NBN bidders were informed of the mandatory requirements in writing on two occasions, and accused Telstra of having ‘more than enough time and resources to fully understand what was required of proponents in this process’.

“Telstra’s Board will have to explain to its shareholders why it has decided to sideline itself from a process that will shape the Australian communications sector for the next decade,” said Conroy.

According to the Competitive Carriers Coalition (CCC), the Board should also explain to ASIC why it submitted the SME Participation Plan more than a week after RFP submissions closed, allegedly without disclosing the contents of the plan to the market first.

“At no stage did Telstra tell the market that it tried to put in more than [the original] 13 page [submission], nor that it had tried to submit an essential component of its bid after the deadline,” said David Forman, executive director of CCC.

“If the original 13 page bid required disclosure, surely the additional parts of the bid must also have been subject to Telstra’s continuous disclosure obligations.

“This also begs the question; what else did Telstra secretly attempt to submit after the bidding deadline had passed?”

Forman said that ASIC and the Australian Stock Exchange ‘must investigate whether Telstra was meeting its continuous disclosure obligations to its shareholders in telling them only part of the story’.

“If Telstra was trying to have the SME plan accepted after the deadline it must have known that its bid was non-compliant as submitted on November 26,” he added.
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