AAPT doesn't affect bid: Terria

National broadband network consortium Terria said today that AAPT's withdrawal from the group would not affect its ability to hand in a bid on 26 November.

Terria chairman Michael Egan
(Credit: Terria)

Although Terria chairman Michael Egan regretted AAPT leaving the group, he understood the desire by the carrier's parent Telecom New Zealand to focus its money on the home market after its profit warning yesterday as it marked out half a billion dollars for a new 3G mobile network.

Egan said that AAPT's leaving would not affect the consortium's bid financially or otherwise as AAPT had always said it did not intend to invest significant equity in the bid.

Despite reports that Terria needed to rethink its finances because of the credit crisis, Egan also laughed off speculation that the group wouldn't be able to sort out funding in time.

"It's not as though there isn't any cash around in the world," he said. "Getting finance always depends on the quality of your business case."

Egan was convinced that Terria's commitment to roll out first to rural areas would create more new customers first than resupplying broadband customers in metro areas and would therefore provide more revenue in the start of the roll out. Telstra, on the other hand, he said had indicated it would take eight years to reach rural areas.

AAPT's decision would not affect its operations in the future, Egan said. "They'll be an access seeker," he said, receiving open access to wholesale services like any other carrier.

He denied that AAPT's departure might have had an ulterior motive, saying that Terria was still a happy consortium.

Maha Krishnapillai
(Credit: Optus)

Maha Krishnapillai, director of government and regulatory affairs at Optus, which has, unlike AAPT, committed to spending its money on a Terria roll-out, echoed Egan's confidence that AAPT's decision would not have any affect on the bid.

"Optus has indicated for some time that we are keen to invest one to two billion dollars in the Terria broadband bid along with other equity investors while AAPT has indicated for quite some time that it will not be a significant financial investor for Terria," he said. "[AAPT's departure] will have no impact on the fact that this is a very strong infrastructure investment and we'll be putting in a complete bid on 26 November."

Communications Minister Stephen Conroy, speaking at a press conference in Canberra today, wasn't concerned about the carrier's departure from Terria.

"I'm still very confident that we're going to have some very viable proposals on November 26," he said, adding that there was plenty of competitive tension over the project. "You wouldn't be seeing all this commentary if there wasn't lots of lobbying, jockeying, positioning to put in for the tender," he said.