Macquarie dumps NBN dreams for Telstra finances

Macquarie has given up aspirations to launch its own bid for the fibre-to-the-node national broadband network (NBN), instead joining Telstra as the company's financial advisor.

The bank had been tipped to launch its own bid to build the network — set to provide minimum broadband speeds of 12Mbps to 98 per cent of Australians — a rumour which it initially declined to confirm or deny.

According to a Telstra spokesperson, the financial giant is a good match for the telco. "It's quite a perfect fit in a sense. We are the experts in the network… They're used to putting together complex deals — this will be a very complex deal."

Such a partnership was foreseen by IBRS analyst Guy Cranswick when it was rumoured Macquarie was looking to bid. He said the bank had the capability to make a bid work financially, but would need to partner with another company for the network itself.

"What we have at the moment is lots of noise, who is partnering with whom, or going alone … as the deadline approaches the pressure will build and perhaps some unforeseen partnerships will happen," he said.

Macquarie's exit means the bidding is now a two-horse race, according to Michael Egan, chairman of Terria — a consortium of telcos making up Telstra's main rival in the bid: "There are only two major players that are bidding for a nationwide network."

The government will be able to choose from two opposites, with Terria wanting a structurally separated network, which is opposed by Telstra. "We're the only ones advocating an independent, open network," Egan told ZDNet.com.au.

Terria is still looking for a finance partner but is in no hurry. "We want to make sure the financial advisor has the right price tag. [Macquarie's] fees were, we thought, too high," Egan said, adding that extra financial costs ultimately lead to higher prices on the network.