Macquarie quiet on FTTN bid as TransACT enters race

Competitors for the national fibre-to-the-node network tender had their last chance to submit the required AU$5 million bond to the Federal government late last week, with Macquarie Bank yet to confirm its entry into the race.

A spokesperson for Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy was unable to confirm whether the investment bank has lodged its AU$5 million deposit to bid for the network, saying that the government "is not in the position to reveal the quantity or identity of parties involved".

When contacted by ZDNet.com.au today, a spokesperson for Macquarie Bank also refused to comment on the bid, leaving its status in the race for the tender unclear.

David Cannon, senior analyst at research firm IDC, said the company could easily pay for the bid bond. "Macquarie will no doubt be able to finance this without too much trouble. What's most important is that they [Macquarie] take on the correct partnering strategy with a builder or large services arm, and act themselves as a true wholesaler with no retail interests," he said.

According to Cannon, Macquarie is trying stay "low key" about any actual submission, in an attempt to stay out of the ongoing political saga surrounding the network.

"They'd [Macquarie] be most interested at this stage in finding out what is truly involved in this and bring their partners up to speed ... there's still a fair amount of the unknown in all of this," he said.

As the deadline to submit the bond and confidentiality deed to the Federal government passed Friday at 5pm, the Department also received surety payments from Terria — formerly the G9 consortium — as well as Optus and ACT-based provider TransACT, both members of the group.

"I think [the Optus bid] is a redundancy tactic — you never know who's going to be in it for the long haul and if, for whatever reason, a conflict of interest arises with Terria, Optus has the backup option to go it alone," said the IDC analyst.

Although the Minister's office would not identify the bidders themselves due to "probity concerns", Senator Conroy did note the "strong interest" received ahead of closure of the deadline on Friday.

TransACT confirmed today that it had submitted its bond in the form of bank guarantee, along with its confidentiality deed, to the government on Friday.

"We're still very much committed to Terria," said TransACT CEO Ivan Slavich. "But we just want to keep our options open in terms of an individual ACT bid."

Although IDC analyst Cannon doesn't consider TransACT to be a serious contender for the network, he believes each separate bid lodged for its tender is "very healthy" for the competitive process.

"This is another step towards securing a competitive environment regardless of the outcome ... if it was a one-horse race we'd see a network put together just to deliver a campaign promise," he said.

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Talkback 5 comments

    Previous experience Lord Watchdog -- 27/05/08

    If ever there was a company qualified to roll out fibre technologies to customers it is probably TransACT, as they have done so over a fair sized area in Canberra. The problem with this though is that TransACT has a track record for inflated pricing.

    The bigger problem is that no matter who is asked to build the network, there will still be no real competition because there is no-one that is prepared to build a fibre network alongside someone else's. End result is that Internet access in Australia will be like buying groceries - a limited number of players price-gouging customers to a level based on the competition available in each area.

    Does TERRiER want to be a monopoly? Sydney Lawrence -- 27/05/08 (in reply to #320102707)

    Lord Watchdog surely a free and open competition system dictates that whoever wishes to invest, build and compete is allowed to do so

    That is the reason I am very suspicious of the TERRiER proposal that, I understand, do not want competition for twenty years.

    "true Competition" Anonymous -- 28/05/08 (in reply to #320102722)

    It's quite simple! True competition (not the regulated, spongy type OPTUS love) is most WELCOMED!

    Free and open competitive market. Sydney Lawrence -- 28/05/08 (in reply to #320102766)

    Anonymous I agree entirely. The ACCC though their efforts may be with good intention, are in fact restricting competition by the rejection of a free and open competitive market.

    TransACT Qualified? Bob Arnold -- 28/05/08 (in reply to #320102707)

    You seem to forget that TransACT was unable to roll out their proposed network in the ACT. A full fibre rollout proved to hard for them to manage. The ACT is a very small place and TransACT after all these years have not been able to build the network they initially intended to.
    TransACT is the last company I would called qualified to take on a project of this magnitude.

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