Govt will consider Telstra's bid

Govt will consider Telstra's bid

Summary: Telstra's proposal to build the government's $4.7 billion national broadband network has been accepted as a bid by Communications Minister Stephen Conroy, who late yesterday said it would be passed it along to the expert panel in charge of the process.

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Telstra's proposal to build the government's $4.7 billion national broadband network has been accepted as a bid by Communications Minister Stephen Conroy, who late yesterday said it would be passed it along to the expert panel in charge of the process.


(Credit: ZDNet.com.au)

"Telstra's proposal will be considered in exactly the same way as all of the other five proposals," Conroy said to gathered press at a conference yesterday, confirming that the government had received six bids and dashing any hopes of a yet unknown bid coming out of the woodwork.

The parties other than Telstra which have handed in a bid were Optus (backed by Terria), Acacia, Axia Netmedia, TransACT and the Tasmanian Government.

Conroy sidestepped questions from the press about the possible legal quagmire that the opposition has said Telstra's bid could land the government in, saying it was the expert panel's job to decide if Telstra's proposal met the tender requirements or not. The panel will hand its decisions to Conroy at the end of January.

Conroy implied Telstra's offer wasn't the company's final one. "Do I anticipate that any bidder will put in the best bid at the beginning? Well, that's something for the expert panel to make an assessment on," he said.

Despite this thought, he ruled out any back-room negotiating with the telco, at least until the expert panel considered the bids: "I'm not in a position where I can negotiate with any other individual bidders while the expert panel process is going on."

When asked if the 98 per cent population coverage figure, which Telstra's proposal failed to meet, was non-negotiable, Conroy said it was one of 18 objectives which proposals would be measured on, which he had said were not to be changed.

"The Government has not budged in saying these are the criteria, these are the objectives, and we're not going to be in a situation where we're changing this mid-process. We have stuck to our guns," he said.

When pressed on whether or not the chosen network would definitely reach 98 per cent of the population, Conroy appeared to contradict himself, saying he couldn't guarantee that it would, while commenting that it was an election promise to bring 12Mbps to 98 per cent of the population and the government would deliver on that promise.

However Conroy was adamant that the government would not be contributing any more than $4.7 billion, despite Telstra's proposal claiming that reaching 98 per cent of the population was impossible without additional funding.

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

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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20 comments
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  • NBN Bidding - Telstra fall out - good for the country

    Thank you Hon Minister to clarify that Telstra bid would be accepted as a Bid. However, whether it will pass the 'legal compliance tests' of the NBN tender, future will tell. There is no room for back-office negotiation here. If Telstra gets the chance, every one gets the chance to revise their proposal. It will be a 'legal quagmire' to continue like that and NBN start will take forever, the process will linger and NBN budget will suffer from prolongation cost.

    In my opinion, Telstra missed the boat, failed to participate in the project of the century.

    Govt would be better off without Telstra in following way:

    1. TransACT offerred to 100Mbps for all in ACT, so they should get the bid for ACT part of NBN

    2. Tasmanian Government offerred to build the Tassie part of NBN, their proposal is far better than Telstra; so they should get the tender for that part of NBN

    3. Axia/Terria/Acacia all have submitted the legally compliant bid; offered better than Telstra. So they should get chunks as per their capability.

    In that way, competition will thrive in the country. Telstra will invest $5 billion, to survive with new competitors anyway, all other bidders will have to invest the required sum to get the slice of the market, in total more money will flow through in the sector.

    This will be win-win for the nation.

    Of course, this is something for the panel to work out whether that approach will dilute the market too much or is this sustainable for the total telco sector or what's the crtical mass needed for each business to thrive, whether Fed Govt will consider to run the NBN Foundation as a business unit (??) to become a sharholder (?) in the overall NBN consortium (?), those sort of issues, whether that approach will reduce the price or increase the price etc.

    Let's wait and see.
    anonymous
  • Australia deserves the 'Best" NBN

    ....not something "hobbled" together & knocked up by dodgy operators. The Country deserves the best & Telstra has the proven track record!!!

    The sooner the wannabes move over Telstra can get on with the job!!
    anonymous
  • International Track Record

    Telstra has a good "track record" in Australia because it is the only one ever on the track!!

    Terria and Axia both have plenty of international experience in providing much better technology than Telstra ever has.

    So Australia deserves the best?? Yes it does and the best is not Telstra!!
    anonymous
  • proven track record?

    that 'track record' was notched up when telstra was still a government lacky that would bend to every whim... were dealing with a new, agressive, un-coperative corporation now... its a clean slate with telstra as far as im concerned
    anonymous
  • laughable!

    Telstra have track record or shotty service, over priced, bait n' switch schemes.

    Did i mention over priced!!

    The only proven record Telstra have is a record of taking the australian publics money and delivering bugger all in return!

    Before you try to argue the opisite i have worked in the industry for 12 years. Including for telstra itself.

    If i could chose any company not to build the NBN it would be Telstra we will end up with overpriced, under par service! That sounds familar :D
    anonymous
  • @laughable

    i tend to agree with you to a point, but i think telstra has improved what used to be shoddy service.

    you say before we argue opposite? thats the problem and why we can argue opposite, you work in the industry so you are biased. formerly with telstra, maybe now with a competitor? simple.

    being so, you are unable to look at it as an *average citizen* or what is best for the average citizen. also *if* you were retrenched from telstra you'd *understandably, as would i, hold a grudge*.

    like the vast majority, i do not make a living from IT, comms, isps and do not have allegiances, as you must do! yes, i use pc at work, but i'm not in IT.

    the nbn is for everyone not just IT people. yes, IT people too, but they are probably just 2 or 3% of the population, comms are for everyone not just those in IT, this is where your argument goes astray.

    you can probably afford to be with an isp who offers minimal pricing and minimal support, because you may understand the cause if there's a problem? but *most of us do not and need to pay for decent support*.

    it is here the value needs to be addressed. am i happy to pay minimal and get minimal? or do i pay more and get more (even if i dont use it, bit like insurance)? i'm not saying either is wrong, it whats best for each individual.

    for a few cents per day or few dollars per month, i can understand those who cannot afford, but for those who can, i don't understand what all the fuss is about.

    if you want to talk about over priced, gouging etc, ask the oil companies, big grocery retailers and especially airlines.

    flying from sydney to qld tomorrow. Jetsar, remember the budget airline offering sub $100 flights. because of schoolies $227. thats price gouging, wheres the accc!
    anonymous
  • tsk tsk ned kelly

    "am i happy to pay minimal and get minimal? or do i pay more and get more" - You of all people must know that telecommunications in every other western country does not work like that. And you know why? Competition! We shouldn't have to pay more to get more, we already pay much more than most countries anyway! And if there wasn't such a monopoly here, we wouldn't have to. There were countless ISP's that offered the same quality for a lower price but they went out of business because they couldn't afford Telstra's wholesale prices.

    And your Jestar example would be more appropriate if those high prices were ALL the time and not just when it suits them.
    anonymous
  • Facts please.

    What sort of lunatic rubbish is this. Terria is an $8 company that has never had any experience at all with anything.

    Please try to exhibit a semblance of reality we are discussing serious business here and loony tune comments do no good.
    anonymous
  • @tsk tsk

    problem with these forums is bias. its hard to correspond rationally with those who are obviously either part of one side or for whatever reasons totally against one side.

    so please take your biased hat off for a moment, as you obviously simply dislike telstra, and ask yourself, does any of what you said in bagging telstra make it right for the airlines to do that?

    I'm sure most people would say *yeah that's wrong, airlines shouldn't do that*, but all you wanted to do was support their gouging and bag telstra. each to their own I guess. I personally think telcos and airlines suck, but relating to airlines, you obviously dont mind paying normal costs most of the time and 3 x the prices at other times.

    back to the topic of telecommunications, regardless, in case it wasn't evident i was referring to online support in time of trouble, which some cheaper isps' only offer at certain times, like business hours. so some prefer peace of mind and will pay more and quite frankly i couldn't give a hoot what happens in other western countries, i'm concerned with here!

    look i'll say it again, i dont like (or for that matter dislike) any telcos, they are all just money grabbing companies ALL OF THEM. this love/hate relationship some have is quite laughable to me, but if you are a *stakeholder* in a particular company and you stand to gain directly, personally from a particular company doing well, i can see why all the selfishness and disgraceful conduct emanates.

    but if you think one company is worse than the others, well that's your prerogative. telstra is the biggest company and perceived as the biggest rip off. but even if they are, i can assure you that if roles were reversed and the smaller players were in telstra's position they would be doing exactly the same.

    unfortunately that is known as business and kow towing to the shareholder.
    anonymous
  • @@ tsk tsk

    Wow ned kelly I actually agree with you here
    "i can assure you that if roles were reversed and the smaller players were in telstra's position they would be doing exactly the same"
    You're exactly right - but the only reason you're right is because any company in Telstra's privatised non structurally separated position would be doing the same thing. It's not Telstra's fault they were privatised, and they're making lemonade with the lemons they were given.

    However your prices for flights still remains a not quite accurate example. There are peak seasons and there are low seasons anywhere in the travel market. It's widely accepted.
    anonymous
  • Compliant or Not

    Having authored and released many RFT to the market, I think the point that seems to have escaped you all is that very few responses to any RFT are fully compliant.

    Respondents often submit responses that do not partially or sometime fully comply, but offer a different set of options to achieve the same goal of the RFT as they see it.

    This is normal behaviour in the RFT world. Yes, the respondent takes on a risk that their proposal will not be considered. That is also their choice.

    In the end, it is up to the expert panel to review each response based on the criteria that was developed to review and rate the responses. These criteria are developed as part of the RFT process and will be freely available when the process closes - its part of the transparent process we have.

    If I had paid the required money and submitted a 1 page document suggesting we go back to signal fires and flags, the panel would still be required to review it and rate it using these criteria.

    I would have thought that all the Telstraphobes that inhabit these forums (or is that forii) would be more than overjoyed that Telstra have put themselves in a position to be ruled out of the race.

    Apparently there is no pleasing some people.
    howardmg@...
  • @ Compliant or Not

    I think the 'Telstraphobes' will be happy in March when the public can find out what this 'panel of experts' have finally decided

    And are RFT's are the same as RFP's?
    anonymous
  • Stop the rot Sydney

    What is all this garbage about $8? It costs $300 just to register a company name, then there is logo design, registration of intellectual property, professional indemnity and public liability insurances, legal fees, stamp duties and wages for directors and employees.

    Then after that comes getting quotes for laying cable, terminating cable, installing switching and patching equipment, building construction, interconnection with backbone providers, etc etc etc.

    This garbage about $8 doesn't wash Sydney and I think you of all people need to get a grip on reality. Companies like Optus and iiNet have been in the game for long enough to know what they are doing. Their expertise in building networks is no greater or less than Telstra's.
    anonymous
  • Wannabees?

    Optus was a wannabee once - with a small team in a little office in Bondi they successfully bid for and have successfully become Australia's second carrier.

    The "other wannabees" - Axia and Acacia are equally capable. Acacia with some serious funding and technology partners behind them. Nokia Siemens networks and Fujitsu. NSN are Asia Pacific BIGGEST telco vendor and Fujitsu rolled out ALL the fibre for Optus - thousands os successful kilometres worth...

    I think it is time for a third major player in Australia's telco market - to keepTelstra honest and to encourage Pptus to stat investing in new tecchnology themselves....
    anonymous
  • RFT

    RFT = Request for Tender

    RFP = Request for Proposal
    anonymous
  • NOT WHO, BUT WHEN

    i have little concerns over which of the companies wins this project, as i am sure none of them have pull a figure out of a hat to come up with their tender price.

    My problem with the whole situation is it should have been started years ago. Get some decent services to the people demanding it and the quicker the better.
    anonymous
  • Telstra didn't bid

    While Telstra's 12-page letter should be passed on to the panel for assessment, just like the other documents submitted, in practical terms Telstra did not bid. Telstra wrote a letter explaining why it was *not* submitting a bid and outlining what it would like to do. Such a letter will not get far in any properly-constituted evaluation process (and we all know what a stickler Kevin Rudd is for process!). In essence Telstra has thumbed its corporate nose at the government's RFP, perhaps hoping to reduce the process to a farce. If any bidder other than Telstra is successful, this unleashes the contentious legal issue of access to Telstra's "last-mile" copper. The government is not obliged to accept any of the proposals, but then it would have to explain why none was acceptable. And it would either have to start afresh, incurring a delay that would be politically toxic, or stitch up a deal with Telstra pretty quickly. That would be a total win for Telstra. If I were Stephen Conroy I don't think I'd be able to enjoy my summer holiday this year!
    anonymous
  • Re: Compliant or Not

    M0TT's comment is one of the few that addresses the subject matter and avoids bias. The fact is that Telstra's letter will not get far in an objective evaluation process. So one has to agree with the conclusion that "Telstra have put themselves in a position to be ruled out of this race" and whether we are Telstraphobes or Telstraphiles, that is a sad state of affairs for Australians. I can only think that the Telstra board's fear of the twin bogeys of regulation and separation have led to some bizarre decisions. (FYI the English plural of forum is forums; the Latin plural is fora.)
    anonymous
  • Telstra' NBN bid

    I think Telstra's bid should be given every considrration. Why should Australia let Tierra or some other dodgy mob gamnle with our future??
    anonymous
  • anon

    tierra didnt bid, telstra, in their own words 'didnt lodge a bid, but a proposal' so telstra hasnt got a bid to be considered... to put it bluntly i spose...
    anonymous