Telstra say that $5 billion more will need to be spent on broadband

In order to comply with the tender terms for the National Broadband Network, Telstra have said that at least $10 billion will need to be committed by the Rudd Labor Government for it to be built.

Under proposals from Telstra the federal government would have to invest “at least double plus” into the network to build a fibre-to-the-node broadband service that would cover 98 percent of the Australian population according to Greg Winn, the chief operating officer at Telstra.

The estimates from Telstra will mean that that cost of an FTTN network that can stretch to Australia’s more remote areas will be around $10 to $12 billion, which is based on the $4.7 billion that the Labor government has currently committed to invest.
With the economic climate currently the way it is Mr Winn said that it didn’t seem likely that an investment of this size would be made by the federal government.

He said “I know what it costs but I’m not going to share that number. It’s substantial and I think it’s more than the government would want to spend.  Maybe if the economy was different and they had a big surplus but what’s going on and the spending they’re doing to try to do to stimulate the economy and keep Australia out of a recession.”

A commitment to spend up to the agreed $4.7 billion is be something that the government will be sticking to, said a spokesman for the Communications Minister, Stephen Conroy.
The fact that bidders are looking for an increase in funding is something that Senator Conroy had previously said did not surprise him at all.

Senator Conroy said “Is it any surprise that any of the bidders might say, ‘give us more government money, and we might be able to reach your objectives’? These are hard-nosed, commercial negotiators, and this will be a tough, hard-nosed negotiation. It’s no surprise to see commentary about, ‘we need more government money’, as part of this process. But I won’t be commenting on any individual bid. What we have to be judged on is the final outcome against the objectives of the RFP, not the first cut bids that have come in.”

It was during the communications and media company’s latest stage of aggressive campaigning to sell its NBN building credentials that Mr Winn made his latest comments. During analyst and media briefing held at the same time in Melbourne and Sydney the company issued details of it network building bid.

The roll-out of at least 50 000 fibre-to-the-node cabinets were planned as part of a project by Telstra although at least 5000 services cutover per day to the network would be needed. The supply of services to as many as 384 customer premises would be available through each of these cabinets.