Breach in Terria's hull sealed

The telco exodus which has plagued the Terria broadband consortium over the last week is now over, according to remaining members, who yesterday pledged their support as being "rock solid".

A Terria billboard in Canberra
(Credit: Terria)

Following the departure of AAPT, Soul-TPG and TransACT from the consortium, Terria gave assurances that the CEOs of Primus Telecom, Optus, Macquarie Telecom, Internode and iiNet had confirmed their companies were staying with the consortium.

ZDNet.com.au received the same assurances when contacting the parties individually, although iiNet CEO Michael Malone seemed to be less than enthused with the process, saying iiNet was only involved because a Telstra-run process was the worst possible scenario.

"The whole thing is pissing taxpayer's money up against the wall," he said. "There is so much uncertainty across the industry because no one knows what is going to happen next, so investment is retarded and innovation is deterred. Conroy fiddles, but it's the citizens who are being burnt."

Ovum telecommunications analyst David Kennedy said Terria's reduction in numbers showed that the social consensus which had existed between Telstra's competitors was not actually there.

He said that as the deadline loomed, the companies have been frightened by the greater commitment needed.

"The time has come to put up or shut up," he said. "To sign on the bottom line would mean a commitment of funds. For whatever reason, the operators aren't prepared to do that."

Kennedy said that the companies were never going to put in a lot, even before the companies. "The crisis has made them realise that even that isn't worth it."

Terria chairman Michael Egan told ZDNet.com.au that he supposed the drawing closer to the bid date had concentrated companies' commitment, but that all the companies now in were there to stay and had something to give. "They're all contributing in one way or another," he said.

The whole thing is pissing taxpayer's money up against the wall

Michael Malone

Terria would put in a bid whatever happened, according to Kennedy. "The reputations of those involved would be irretrievably damaged if they don't," he said.

Telstra said it wasn't surprised about TransACT withdrawing from Terria, adding that the exodus of companies showed that such consortiums didn't work. Although, Telstra said, Terria losing members was nothing beside its lack of capability to build a network.

"It is crucial to have the world-leading vendors, state-of-the-art equipment, an experienced workforce, intimate network knowledge and, most importantly, the financial capacity to deliver a project of the size and scope of the National Broadband Network. It is clear Terria does not possess the capability," David Quilty, Telstra group managing director, public policy and communications said in a statement.

Ravi Bhartia, CEO of Primus, said that Telstra did not have the monopoly on being able to build a network, since the telco would not build itself, but instead contract work out. "The exercise is one of project management," he said.

As for finances, Optus Krishnapillai said that the companies' departure would have no effect. "We've always known that the most significant bidder will be Singtel-Optus."