Telstra lodges last-minute broadband bid

AUSSIE TELCO Telstra has lost its high-stakes game of brinkmanship with the Rudd Government and shoved in a last-minute bid to build a (Aus) $15 billion-plus national broadband network.

Telstra had threatened to walk away from a government tender if its demands were not met, but this morning its board gave its final approval at an emergency meeting to bid for up to $4.7 billion in taxpayer funding to build a network reaching 98 per cent of the population.

It sulkily said that it was prepared to commit $5 billion to a network.

Communications Minister, Stephen Conroy, has repeatedly told Telstra to go forth and multiply when the outfit demanded assurances that the project will not lead to a split of the dominant telco's business.

Telstra was likely to win the contract and, if it had walked away, it would have left the government's plans in disarray because the telco is seen as the most likely winner.

But it was really a game of call my bluff. Telstra would have lost $10 billion from its market value if it had decided not to compete for the network.

With the Government injecting up to $4.7 billion, the successful bidder will have to provide the rest for a project estimated to cost more than $15 billion.

The tender is to build a network providing minimum speeds of 12 megabits per second. Other bids have come from Optus and a Canadian telco, Axia NetMedia.

Acacia, a group led by prominent Melbourne businessman including Solomon Lew, is also submitting a national proposal. µ

L'Inq
Sydney Morning Herald