Telstra out of the running, Terria claims

Telstra's apparent non-compliant bid has ruled the telco out of the running for the $4.7 billion National Broadband Network, Terria chairman Michael Egan claimed this afternoon.

Telstra out of the running?
(Credit: Lurcher racing at Selby game fair, Nebbish1. CC2.0)

"They're out of the bid," Egan told ZDNet.com.au today, saying that no government in its right mind would let itself be bullied in the way he said the Telstra document was trying to do. "This is what they've tried with the Howard government," he said.

"No government would give into that sort of blackmail... unless it was a Robert Mugabe government," he continued.

Egan wouldn't even call Telstra's document a bid. "It's not a half bid. It's not a bid at all," he said, calling the speeds and coverage mentioned in the document "outrageous". "They've shot themselves in the head," he said.

Ovum telecommunications analyst David Kennedy, however, did not think the telco had definitely ruled itself out, saying that by lodging a short, allegedly non-compliant bid, Telstra had kept itself in the running for the Government's funding.

Kennedy saw the document as an invitation for "senior levels" of government meaning Communications Minister Stephen Conroy and Prime Minister Kevin Rudd, to sit down with Telstra and work out a deal.

Whether the invitation would be taken up depended on the Terria-backed Optus Network Investments (ONI) bid, Kennedy said. "If the department doesn't feel they can accept the Optus bid they're going to find themselves in the position where they can't not talk to Telstra," he said.

Kennedy believed that the other bids would have to be very strong to compete with Telstra's financial and technical abilities.

Gartner analyst Robin Simpson said it was a Mexican standoff at which he wasn't sure the government would blink. He believed that Telstra would be "convinced" into very soon filing a proper bid, which would allow it to continue in the process, unless the government decided that Acacia's, Axia's or Terria's bid was good enough to exclude them.

He said Telstra's strategy was risky, especially given that Terria's bid seemed to be compliant, saying in the release it meant to meet the 98 per cent coverage objective. "I think [Telstra's] painted themselves into a corner," he said.