French networking hardware supplier Alcatel-Lucent has won a significant contract to supply the National Broadband Network Company (NBN Co) with up to $1.5 billion of optical and ethernet aggregation equipment.
The deal means Alcatel-Lucent will be the "initial strategic supplier" of Gigabit Passive Optical Network (GPON) and ethernet aggregation equipment needed to operate the NBN, according to a statement issued by NBN Co this afternoon.
NBN Co has committed to an initial $70 million fixed price purchase for the equipment, according to the company's head of corporate services Kevin Brown. It plans buy up to $1.5 billion of hardware during the NBN construction period.
Other GPON equipment suppliers will also be engaged once NBN Co achieves "full roll-out scale", according to the executive. "The contract with Alcatel-Lucent allows NBN Co to purchase what it needs when it needs it, and allows NBN Co to engage other suppliers at a later date of our choosing," he said.
A further $15 million contract with the French networking giant will see Alcatel-Lucent provide services over the next 12 months to assist NBN Co with engineering and testing activities in the initial roll-out phase of the NBN.
Both NBN Co chief executive Mike Quigley and chief financial officer Jean-Pascal Beaufret have long histories with Alcatel-Lucent — Beaufret served as the company's CFO from 1999 through 2007, and Quigley himself has a 36-year history with the company.
However, NBN Co has moved quickly to attempt to squash any impression that that history could have influenced the billion-dollar win announced today.
Brown's statement noted that neither Quigley nor Beaufret participated in the decision by the NBN Co's executive committee to select Alcatel-Lucent for the deal. Brown also claimed that the pair were not involved in any price negotiations, and that they didn't participate in board approval to select Alcatel-Lucent for any contracts.
"This significant contract is consistent with the detailed NBN Co procurement approach and the board-approved selection process," NBN Co's statement said.