Australia requests bids for $8.8 bln broadband network

MELBOURNE (Reuters) - The Australian government has called for bids for a A$9.4 billion ($8.8 billion) high-speed broadband network that will help the country catch up in competitiveness with its peers.

Australia has slower and more expensive Internet access than many other developed countries and officials have warned Australia may become less competitive without faster, nationwide coverage.

Communications Minister Stephen Conroy said in a statement late on Friday the government wanted the fiber network to deliver minimum speeds of 12 megabits per second to 98 percent of Australian homes.

About 64 percent of homes have broadband now. The vast distances in Australia and often inhospitable terrain make full penetration difficult.

The government is offering A$4.7 billion ($4.4 billion) in funding, which it wants the winning firm to match.

A consortium of nine firms led by Optus, owned by Singapore Telecommunications, and the former government monopoly Telstra Corp Ltd are expected to bid.

It has not been decided whether the network will deliver fiber to the neighborhood “node”, usually in each street, or directly to homes.

Conroy also suggested the separation of the network and services operations of the dominant telecom may be considered, as has happened recently in New Zealand.

“The government is prepared to consider changes to existing telecommunications regulations, to facilitate the roll-out of the network,” he said.

Proposals are due by July 25 and a decision is expected in October.

“Telstra is ready to build this network, as long as it makes business sense to do so,” Telstra spokeswoman Kate McKenzie said.

Analysts have said Telstra’s existing copper and fiber network gave it a head start over any rivals, but it would be at loggerheads with the government over how much to charge for fast broadband.


Reporting by Victoria Thieberger; Editing by Jan Dahinten