Optus bids to go bush

Optus wants to push its mobile broadband services deeper into regional Australia and has asked the government for help under the Broadband Connect program.

Last week, the SingTel subsidiary said it planned to spend between AU$500 million and AU$800 million to extend its third generation (3G) mobile coverage outside of Australia's capital cities to rural areas. 3G mobile networks can provide both broadband and mobile phone services.

While that network is planned to reach 96 percent of the population, Optus has now proposed to reach a further two percent -- or 500,000 square kilometres -- with another 750 base stations built using government funding.

Optus said the extension would cost AU$370 million. The company has proposed it would pay AU$170 million, and the remaining AU$200 million be funded by the government's Broadband Connect program.

If the proposal is successful, the extended network would operate at the 900MHz spectrum. It would be overlaid with high speed downlink packet access (HSDPA) technology, initially offering speeds of 3.6Mbps and later 14.4Mbps.

In a statement issued this afternoon outlining the bid, Optus director of Corporate and Regulatory Affairs, Paul Fletcher, claimed Telstra had received over AU$350 million of funding to expand its rural network over the last 10 years. Optus claimed Telstra had used AU$120 million of that money for its mobile network.

"To date, most government funding has reinforced the incumbent's rural monopoly. The government can now square the ledger by funding the expansion of a competitive network into areas where it would not be commercially viable to build," Fletcher said.

"By doing so, the government can entrench network-based competition for virtually all Australians for the foreseeable future."

The "Optus Broadband Plus" proposal would touch towns such as Culculandah in NSW, Cape Bridgewater in Queensland and Andamooka in South Australia, among rural areas in all states.

Optus is also proposing a separate, fixed-line broadband network funded under Broadband Connect, in a joint application with Elders' telecommunications division.