Macquarie dumps NBN dreams for Telstra finances

Macquarie dumps NBN dreams for Telstra finances

Summary: 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.

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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.

Topics: Broadband, Telcos, Telstra, NBN

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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6 comments
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  • Pressure now on TERRiA.

    Suzanne to be honest, how could TERRiA expect to attract a financial backer when they tell all and sundry that the investor will make a very low return on the investment.

    To be honest I believe that TERRiA never wanted to win the NBN build but simply wanted to act as a spoiler and push for the separation of Telstra, and of course continue the freeload. Time will tell.
    anonymous
  • Blame Labor for it all

    Macquarie Bank are in the game for the same reason that Telstra is - to make a fast quid whislt spending as little as possible. I am quite sure that Macquarie don't really care what they do to get what they want, just as long as the goal is reached.
    anonymous
  • "True Competition"

    Lord Lapdag,

    What you refer to above has been Singtel/Optus "Modus Operandi" for the last 10 years or more...about time you see things for they really are!!

    As Donald McGauchie rightly says OPTUS are the "Dole Bludgers " of the Telecoms Industry!!

    What this country needs is "True Competition" not stuff OPTUS can sponge off!!
    anonymous
  • Definition of "True Competition"

    steve, you're obviously a telstra "lapdag" or a disgruntled Telstra shareholder intent on blaming Optus or whoever for your poor investment decisions.

    I'm no dire fan of Optus but to call them bludgers who sponge off (I assume) Telstra shows a complete lack of understanding of the telecommunications market. The situation we now find ourselves in is a direct outcome of a lack of courage and probably some foresight by previous Labor and (mainly) Liberal governments who chose to implement the "version" of competition we now have. Optus and others are merely trying to make the best of it in difficult conditions. The regulator has recently acknowledged in recent Senate hearings that the current regulatory arrangements have essentially failed, mainly due to a lack of incentive for the incumbant provider to change or do better.

    If you want "True Competition" then I'd suggest you lobby the government for "True" separation of the Customer Access Network from Telstra, as this is the only way to really provide a level playing field. The same goes for the NBN. Without a truly separate network provider wholesaling to the service providers nothing will improve.

    Let's learn from the lessons of the past and at least try to get it right this time.
    anonymous
  • "Definition of True Competition"

    Hi Anonymous,

    obviously you dont actually understand the situation and therefor can be somewhat forgiven for that prior comment.

    You cannot seperate the CAN from Telstra without providing fair and just compensation by our constitution, which would be a very very substantial figure.

    Competition doesnt remove the need for upgrades to the network, technicians to work on it, upgrades to nodes, repairs, services in remote areas etc, so unless your suggesting the government should act as the base party running the network, im not sure who you think will finance all these things, unless of course optus is willing to pay! which I highly doubt.

    Optus are a sponge, and this is perfectly obvious with them removing basically all customer facing telephone service people from australia and moving them overseas for a quick buck.

    Optus is a company that came in, right when "anti telecom" sentiment was at its highest in the marketplace, and has kept up an attack on telstra ever since. The discontent with "Telecom" at the time could have been said to be fair, however times have changed, and unless your going to bitch about included downloads in broadband plans, Telstra are actually very competitive.

    Im sure that if Telstra fired all its staff in Aus and hired all overseas people, they could afford to drop the cost of their plans a bit, but to me, thats really not a good solution. I'd rather pay more and have the phone answered by a local, who's moneys going back into australia when he/she gets paid, and have my call answered within 10 minutes.

    Even if I get transferred by Telstras horrible IVR to seven different departments, ill still get through quicker than I would to almost any area of a competitor except for... guess where.. SALES!

    Sadly people such as yourself are obviously fooled by monkeys and elephants on adds, and a whole lot of PR with no substance behind it.

    Competition would be if optus/other players actually kept building their HFC network, or invested in something without getting subsidised the entire way.

    Without investment by other players, and im talking "REALISTIC" investment, and not a shoddy upgrade of an already shoddy 3g offering, then im afraid instead of competition, you've simply got a load of competitive sponges.
    anonymous
  • "True Competition"

    I agree with padz

    "Without investment by other players, and im talking "REALISTIC" investment, and not a shoddy upgrade of an already shoddy 3g offering, then im afraid instead of competition, you've simply got a load of competitive sponges."
    anonymous