Telstra baits Government with NBN ‘detail’ carrot

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Telstra baits Government with NBN ‘detail’ carrot

Telstra will hold the government to ransom by submitting a ‘proposal’ to build a $9.7 billion National Broadband Network but withholding more detailed bid documents.

The telco’s chairman, Donald McGauchie, called a last-minute press conference 45 minutes after the RFP deadline to dangle the ‘detailed bid document’ carrot in front of the government.

“While Telstra has devoted very considerable resources to preparing a fully detailed bid, a number of fundamental issues have not been resolved,” said McGauchie.

“Each of these unresolved issues causes unacceptable risk at a time of significant economic uncertainty, resulting in the Telstra Board deciding it is not in the interests of shareholders for Telstra to put forward a fully detailed bid at this time.”

McGauchie said the NBN proposal was ‘essentially an upgrade of Telstra’s fixed network’.

It will cost around $9.7 billion to build - $4.7 billion in the form of a concessional loan from the government, and ‘up to $5 billion' of Telstra's own capital’.

Only 90 percent of the population will be covered – less than the 98 percent the Federal government has claimed the NBN should cover.

Up to 75 percent of the coverage area would achieve downlink speeds of between 25 Mbps and 50 Mbps. The remainder would get between 12 Mbps and 20 Mbps, Telstra said.

Prices would start at $29.95 for an ‘entry-level’ 1Mbps plan – but only if customers signed up for a Telstra fixed line service.

Despite this, McGauchie claimed Telstra’s proposal was ‘pro-competition’ and would be ‘open access’.

“Our proposal is subject to a number of conditions for the life of the project, including no further separation of Telstra and regulatory certainty,” McGauchie said.

He said the rollout would commence ‘as soon as possible and be completed far quicker than any alternative’.

Rivals Terria (led by Optus) and Canada’s Axia are expected to submit more detailed bidding proposals.
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