SingTel – BT

Australia scraps US$871m broadband contract

SYDNEY – Australia’s government has cancelled a multi-million dollar deal with telco Optus and rural finance business Elders to build a broadband Internet network across the vast nation, the partners said on Wednesday.

Former prime minister John Howard announced the A$958 million (US$871 million) agreement last year, saying the Optus/Elders joint venture Opel would supply fast and affordable wireless broadband to hundreds of thousands of Australians living in remote areas.

But Optus, the Australian off-shoot of Singapore telco Singtel, and Elders’ parent company Futuris said that the new Labour government felt that the plan failed to meet coverage requirements and had cancelled the contract.

Optus and Elders dispute the assertion.

‘The Opel network is capable of meeting the objectives of the Broadband Connect Infrastructure Program and delivering improved broadband services to 889,322 underserved premises in rural and regional Australia within two years and at metro-comparable prices,’ Futuris said in a statement.

The government also said that the Opel network could duplicate a nationwide fibre-to-the-node (FTTN) broadband network proposed by newly elected Labour Prime Minister Kevin Rudd, the partners said.

Optus’ main rival, Australia’s largest telco company Telstra, welcomed the news as a ‘commonsense decision’.

‘The previous government’s decision was made as a result of poor process and delivered little for regional Australia,’ Telstra’s national group managing director Geoff Booth said in a statement.

The Howard government had planned for the OPpel network to deliver affordable broadband access to 99 per cent of Australia’s population of 21 million by 2009.

Labour has vowed to supply 98 per cent of homes with high-speed Internet services within the next five years and is hoping to attract proposals from a number of companies, including Telstra and SingTel, for the FTTN network. — AFP

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