* National broadband network's future hinges on election
* Telstra big winner from opposition Coalition plan
* Coalition election victory could open door for Huawei
By Jane Wardell
SYDNEY, July 16 The future of an ambitious
project to connect almost all Australia's far-flung inhabitants
to high-speed internet, the largest infrastructure enterprise in
the country's history, is hanging on the outcome of an upcoming
The Labor government and conservative Liberal-led opposition
have vastly differing plans for the A$37.4 billion ($34.2
billion) National Broadband Network (NBN), potentially hurting
some business stakeholders and opening the door to others,
including China's Huawei Technologies Co Ltd.
"It will be a significant shift, we are talking about
completely changing the idea of the rollout," Melbourne-based
RMIT University electrical engineering expert Mark Gregory said
about a possible Liberal-led coalition election victory.
"There will still be activity, but there will definitely be
winners and losers."
A national high-speed network is central to Australia's
plans to become one of the world's leading "digital economies"
as it seeks alternative drivers of growth to replace a fading
mining investment boom.
Prime Minister Kevin Rudd's Labor government has promised to
deliver Internet speeds of up to 100 megabits per second (Mbps)
to 93 percent of premises by 2021 using fibre-optic cables, with
the remaining remote locations served by satellite and fixed
The planned network, which takes the fibre-optic cable
direct to households and businesses, would be one of the most
advanced in the world.
But just three years in, the 10-year project is plagued by
problems, including delays that led the government-owned NBN Co
to seize back control of construction in the Northern Territory
from Syntheo, a joint venture of Lend Lease Corp Ltd
and specialist construction firm Service Stream Ltd.
NBN Co's chief executive Mike Quigley quit last week after
the interim targets for the number of premises connected in the
rollout were lowered three times.
The government has promised to connect 8.5 million premises
to the network by 2021. By June this year, just 163,500 had been
hooked up, less than half the downwardly revised interim target.
The delays have opened the door for Rudd's challenger,
Liberal Party leader Tony Abbott, to lambast the project as too
expensive and unnecessarily complex.
Abbott instead promises a A$30 billion fibre-to-the-node
network. Under this plan, high-speed fibre would be laid to
streetside "nodes" but the final connection to homes and
businesses would rely on Telstra Corp Ltd's ageing
copper wires, with much slower download speeds than fibre.
The Liberal Party says this would provide 25 Mbps minimum by
2016 and 50 Mbps for the "vast majority of households" by 2019.
Abbott argues that is "more than enough for the average
household", dismissing critics' warnings it would leave
Australia with an outdated network that would only be as good as
its weakest, copper links. The opposition would also use
satellite and fixed wireless for remote locations.
WINNERS AND LOSERS
Rudd has until the end of November to hold an election and
the NBN is shaping up as a key battleground. Opinion polls show
Labor and the Liberal-led coalition running neck-and-neck.
Should the coalition win office, Shenzhen-based Huawei,
which Labor has banned from bidding on any NBN contracts because
of cyber security concerns, could be one of the big winners.
Coalition communications spokesman Malcolm Turnbull has said
a coalition government would take another look at advice from
spy agency ASIO that led to the ban on the private Chinese
"Huawei has a fibre-to-the-node solution and I imagine they
are in there giving Turnbull as much guidance as possible,"
Huawei declined requests for comment.
Any entry by Huawei into the bidding for future work could
take business from current lead contractor, France's
Another potential winner from the coalition's plan is
leading telecommunications firm Telstra, as the speedier rollout
would mean quicker payments for the switchover of customers from
its copper network.
Deutsche Bank analysis suggests Telstra will retain its
broadband market share of around 47 percent, instead of a slide
to 35 percent under Labor's project.
Telstra would also keep its hybrid fibre coaxial cable for
Pay TV delivery as a competitor to the NBN, a scenario that does
not sit well with Singapore Telecommunications Ltd's
Australian unit, Optus.
The coalition plan could also marginally reduce business for
Silcar, the 50:50 venture between Germany's Siemens AG
and Leighton Holdings Ltd's Thiess, which is
focused on fibre optics.
But if Rudd pulls off a victory, it will be business as
usual to a certain extent for current contractors.
Still, Service Stream is likely to exit after confirming its
foray into the project had left it with "material losses."
($1 = 1.0933 Australian dollars)
(Editing by Stephen Coates)