Speculation rife over Macquarie FTTN bid

Summary:Macquarie bank has refused to comment on repeated claims that it is preparing to bid for the national fibre-to-the-node (FTTN) network, as observers fete the possibility of another contender entering the race.

Macquarie bank has refused to comment on repeated claims that it is preparing to bid for the national fibre-to-the-node (FTTN) network, as observers féte the possibility of another contender entering the race.

A spokesperson for the Australian investment giant refused to confirm or deny claims that Macquarie is preparing to lodge a bid for the network, after The Australian reported this morning that the bank is readying itself to enter into the tender process.

Despite this, observers have encouraged any potential move by Macquarie to enter a stand-alone bid for construction of the network, saying a new entrant would boost the competitive health of the process.

"When their [Macquarie's] proposal is in motion it will potentially challenge the others on the economic model that is being touted at present," said Guy Cranswick, advisor at research firm IBRS.

According to Cranswick, the bank "certainly has the capability to make it work financially", but would need to partner with another company to build the network.

"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.

Managing director of the Australian Telecommunications Users Group, Rosemary Sinclair, believes that "If Macquarie was to wind up with the tender that would enable a structural separation driven by the financials rather than regulation," she said.

Sinclair also claimed that a contract win for Macquarie or "any other infrastructure company" would likely drive down prices compared to those of an incumbent Telstra network.

"One of the difficulties of a Telstra build is that they'd be trying to preserve the kinds of margins they've enjoyed with their common network-based services, such as fixed-line voice ... the margins from that part of the business are very generous," she said.

"Macquarie would not have that legacy to sustain; like any other third-party infrastructure builder, its mindset would be different to that of an incumbent network owner/operator," said Sinclair.

Topics: Broadband, Government : AU, NBN, Networking, Telcos, Telstra

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