Telstra's proposal to build the government's $4.7 billion national broadband network has been accepted as a bid by Communications Minister Stephen Conroy, who late yesterday said it would be passed it along to the expert panel in charge of the process.
(Credit: ZDNet.com.au)
"Telstra's proposal will be considered in exactly the same way as all of the other five proposals," Conroy said to gathered press at a conference yesterday, confirming that the government had received six bids and dashing any hopes of a yet unknown bid coming out of the woodwork.
The parties other than Telstra which have handed in a bid were Optus (backed by Terria), Acacia, Axia Netmedia, TransACT and the Tasmanian Government.
Conroy sidestepped questions from the press about the possible legal quagmire that the opposition has said Telstra's bid could land the government in, saying it was the expert panel's job to decide if Telstra's proposal met the tender requirements or not. The panel will hand its decisions to Conroy at the end of January.
Conroy implied Telstra's offer wasn't the company's final one. "Do I anticipate that any bidder will put in the best bid at the beginning? Well, that's something for the expert panel to make an assessment on," he said.
Despite this thought, he ruled out any back-room negotiating with the telco, at least until the expert panel considered the bids: "I'm not in a position where I can negotiate with any other individual bidders while the expert panel process is going on."
When asked if the 98 per cent population coverage figure, which Telstra's proposal failed to meet, was non-negotiable, Conroy said it was one of 18 objectives which proposals would be measured on, which he had said were not to be changed.
"The Government has not budged in saying these are the criteria, these are the objectives, and we're not going to be in a situation where we're changing this mid-process. We have stuck to our guns," he said.
When pressed on whether or not the chosen network would definitely reach 98 per cent of the population, Conroy appeared to contradict himself, saying he couldn't guarantee that it would, while commenting that it was an election promise to bring 12Mbps to 98 per cent of the population and the government would deliver on that promise.
However Conroy was adamant that the government would not be contributing any more than $4.7 billion, despite Telstra's proposal claiming that reaching 98 per cent of the population was impossible without additional funding.
Thank you Hon Minister to clarify that Telstra bid would be accepted as a Bid. However, whether it will pass the 'legal compliance tests' of the NBN tender, future will tell. There is no room for back-office negotiation here. If Telstra gets the chance, every one gets the chance to revise their proposal. It will be a 'legal quagmire' to continue like that and NBN start will take forever, the process will linger and NBN budget will suffer from prolongation cost.
In my opinion, Telstra missed the boat, failed to participate in the project of the century.
Govt would be better off without Telstra in following way:
1. TransACT offerred to 100Mbps for all in ACT, so they should get the bid for ACT part of NBN
2. Tasmanian Government offerred to build the Tassie part of NBN, their proposal is far better than Telstra; so they should get the tender for that part of NBN
3. Axia/Terria/Acacia all have submitted the legally compliant bid; offered better than Telstra. So they should get chunks as per their capability.
In that way, competition will thrive in the country. Telstra will invest $5 billion, to survive with new competitors anyway, all other bidders will have to invest the required sum to get the slice of the market, in total more money will flow through in the sector.
This will be win-win for the nation.
Of course, this is something for the panel to work out whether that approach will dilute the market too much or is this sustainable for the total telco sector or what's the crtical mass needed for each business to thrive, whether Fed Govt will consider to run the NBN Foundation as a business unit (??) to become a sharholder (?) in the overall NBN consortium (?), those sort of issues, whether that approach will reduce the price or increase the price etc.
Let's wait and see.