Govt-OPEL WiMax deal 'hit by Telstra case worries'

The government's plan for bush WiMax coverage may well have hit a hurdle, after concerns over an ongoing court case with Telstra reportedly led to a delay in signing the contract with OPEL to build the network.

The bush WiMax network, which has attracted around AU$1 billion in government funding, is scheduled to go live across Australia from 2009, following a successful bid by OPEL, a joint venture between Optus and Elders, to build the wholesale infrastructure.

According to the Sydney Morning Herald, the government has yet to finalise the agreement with OPEL after being advised to wait until a court battle with Telstra is over before concluding the deal.

Telstra launched the legal action earlier this month, alleging that Communications Minister Helen Coonan refused to provide access to documents on how the winning bidder was selected.

Coonan said the bid was "selected simply because [OPEL's] was an outstanding bid when matched against the government's objectives" and Telstra's objections were "sour grapes".

However, according to the Herald, the deal -- scheduled to be signed on Wednesday -- was shelved on the advice of the government's lawyers that there remains "legal doubt" about the scheme, stemming from Telstra's actions.

The Minister's office and Optus did not respond to request for comment.

A Telstra spokesperson said that "significant questions have been raised about the wisdom of this decision" and queried whether government has "something to hide" over the Broadband Connect deal.