More information needed on NBN before Telstra make a decision

Sol Trujillo the chief executive of Telstra Corporation Ltd has advised that no decision will be made with regards to the building of a National Broadband Network (NBN) until the Federal Government is forthcoming with more information.

In an address on Wednesday at a FINSIA executive luncheon he said “We will make the appropriate decision on the day that, you know, the bids and responses are due. We’ve asked for some clarification from the government in terms of their intentions, and so we’re waiting for a response which will help us in terms of the determinations that the board will make.”

If structural or functional separation was a precondition Telstra has advised that it may not put in a bid for the building of the NBN. In the companY’S notice of annual general meeting on Tuesday Donald McGauchie told shareholders that a decision to enter a bid for the NBN, which was due by November 26th, had not been finalized.

On Wednesday Mr Trujillo refused to comment on whether a bid for the NBN would be refused if regulated pricing was insisted on by the federal government. He said “I’m not going to get into the details of issues like pricing and all that because that’ll be part of what we bid and then what the government looks at in terms of their process. So, we’re going to respect that. What we have been clear about is that we won’t bid if there is any kind of requirement around separation.”

Mr Trujillo said the request for proposals for the NBN did not require separation. “We’re just trying to be absolutely clear because when you make a bid you have to make an assumption about the business operating model, which then leads to what your costs look like, which then leads to what prices look like, which then leads to what kind of timing you have. All of that is important.”

As part of the plan to build a superfast broadband network that would cover 98 percent of the population the federal government has put aside $4.7 billion. The rest would be put in by the successful bidder and Mr Trujillo said that it is likely that Telstra would be the only telco that would be able to finance its portion of the costs. He said “We’re talking about a build that’s probably going to exceed $10 billion and could be as high as $15 billion in total costs to build, if all objectives were to be met.”