Feeble bid for the broadband tender made by Telstra

Doubts have now been cast over the tender process for the federal governments national broadband network as Telstra, considered to be a major contender in the running, failed to lodge its bid.

Wednesday saw Telstra, the biggest telco in Australia enter the multi-billion dollar project with a proposal to place a bid. With the backing of the Terria group, Rival group Optus has confirmed that it had placed a bid for the building of the broadband network.

Although a bid was to have been placed by the Terria consortium itself Michael Egan, the chairman of the consortium said that the lodging of the bid by Optus would be in the best interest of Terria.
He said “Terria has agreed to ONI (Optus Networks Investments) submitting the NBN bid while maintaining the Terria principles with genuine open and equitable access to all access seekers, a strong ACCC mandate and structural separation of the national broadband network.”

The decision by Telstra to submit nothing more than a proposal for the bid has thrown doubt over whether any consideration will be given to the biggest telco in Australia for the project and is the reason for the confirmation by Optus that it has made a bid.

In an effort to make sure that consumers benefit from better prices and more competition rivals of Telstra have been lobbying for its retail arm and the network to be split if rights to the project are won. This structural separation issue and its lack of clarity is the reason Telstra has given for not being able to lodge its bid.

Donald McGauchie, the chairman of Telstra said recently “Telstra today provided the federal government with a proposal to build a world-class open access national broadband network (NBN) capable of delivering high-speed access to up to 90 per cent of Australians. The proposal outlines what would be achieved by the fully detailed bid that Telstra has prepared but could not be submitted due to a number of unresolved issues in the government’s request for proposals.”

The network tender process has been branded a shambles by the opposition. Nick Minchin, the opposition communications spokesman said that the issue of structural separation should have been resolved long before the deadline for the bid by Stephen Conroy, the Communications minister.

Senator Minchin said “It is extraordinary that he has knowingly continued to fail to clarify that critical issue, thus resulting in Telstra not submitting a bid. Without Telstra putting in a formal bid you cannot possibly have a viable competitive tender process. This thing has collapsed in a heap, this is massive egg on Senator Conroy’s face.”