Visionstream lands NBN contract worth up to $1bn

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Visionstream lands NBN contract worth up to $1bn

Plots integration of John Holland's comms business.

Visionstream has secured a contract worth up to $1 billion for fibre network design and construction for NBN Co's East Coast rollout.

The firm said today it had picked up work packages in Victoria, Queensland and southern NSW, with an initial value of $334 million over two years.

The contract has a potential value of $1 billion, dependent on the number of fibre serving area modules (FSAMs) completed, as well as the option of two one-year extensions.

The works add to those of existing contractors in the states. Silcar is rolling out fibre to parts of NSW and Queensland, while Transfield has works in Victoria.

Visionstream general manager Allan Bradford told iTnews the first year was a "ramp up" with the smallest volume of work.

"Years three and four would be about the same as year two [in dollar value terms]," he said.

Victoria is the second state where Visionstream holds contracts for remediation of Telstra pit-and-pipe, and rollout of passive fibre — effectively the end-to-end process for brownfields areas.

"We're already doing the NBN passive fibre build in Tasmania, so that gives us the opportunity to streamline the hand-offs," Bradford said.

"In Victoria we'll have that opportunity right now to work between the design phase, remediation phase and construction.

"In the other two areas, really it's about us working with NBN Co and Telstra to make sure that those hand-offs [between remediation and construction] are managed well, and our experience so far is that's going pretty well."

Construction works from the latest contract are expected to start within the next few months.

"The team [is] currently mobilising and undertaking design and surveying," Visionstream said in a statement.

Taking in John Holland

Visionstream will bulk up its wireless expertise substantially after an agreement was struck to take in construction contracting specialists John Holland's communications business unit.

The merger is part of ongoing "strategic realignment" efforts within parent Leighton Holdings, which is also likely to see the divestment of telecommunications and data centre infrastructure business units.

However, Leighton has indicated it is keen to stick with its substantial presence in telecommunications maintenance and field services.

Bradford told iTnews a steering group had been established between Visionstream and the John Holland business unit.

"They're looking for the best thing for our clients, our people and our shareholders," he said.

"We're now working our way through exactly how we'll merge. Initially it'll be business-as-usual, very much a focus on our customers [so we] don't drop any balls, and then we'll figure out the best way for the organisation to be structured going forward.

"Over the next four to 12 weeks we'll make the appropriate organisational changes. But this is one plus one equals two-and-a-half, not one plus one equals one-and-a-half."

Bradford said Visionstream had met with John Holland's customers and "confirmed that they're happy to enter into a novation process".

Customers include Ericsson's NBN subcontracts, as well as Transgrid CUARP alliance, Crown Castle, Telstra Network Construction and Optus.

"The decision to bring the two [businesses] together is reliant on [the fact that] customers have got to be satisfied in the long run that we're going to continue to deliver," he said.

"At this stage all of the customers are comfortable that bringing the two businesses together will end up with a bigger and better delivery mechanism going forward.

He said the combination of the unit's expertise and client base would give Visionstream a wide scope of the market.

"It's a win-win for our clients and for the Leighton business."

Bradford acknowledged John Holland's lead in the technical aspects of wireless and mobile network rollouts.

He said that the end game would have both businesses run off the same "operational systems" and allow greater sharing of innovation to benefit all customers in the combined entity.

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