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Price must be right for fiber: Optus

Optus warns the Australian government that its new fiber network should not be too costly as the race to build Australia's fiber-to-the-node (FTTN) infrastructure heats up.
Written by Jo Best, Contributor on

With a battle ahead to build Australia's fiber-to-the-node (FTTN) infrastructure, Optus has warned the government that the new network should not come at too high a price.

The government's plan to mandate a FTTN network as a complement to its publicly funded WiMax scheme is gathering pace, with the recent announcement of the "expert panel" who will pick a winning bidder to install the fiber.

Despite its current coyness, Telstra is expected to put in a tender, as is the Optus-led G9 consortium. Warren Hardy, MD of Optus's consumer division, said the government must not let FTTN impact competition.

"The benefits of any upgrade must be weighed against the cost," he said today at the Australian Financial Review Broadband Australia conference.

"Telstra says we urgently need a fiber-to-the-node network, but in return for building the network to half the population, Telstra wants to change the rules and lock out competition and charge whatever it likes," Hardy told the conference.

The Optus exec accused its rival of attempting to return to a state of monopoly in broadband services.

"Optus believes consumers are best served by the delivery of networks through open tenders not lawsuits or bully boy tactics--it's far too important," Hardy said, a reference to Telstra's ongoing legal wrangling with the Communications Minister.

David Tudehope, CEO of Macquarie Telecom--another G9 member--echoed the sentiment that if Telstra were to win the bid, competition would suffer. "If Telstra were to be successful, it would be back to the future--it would mean turning back the clock 15 years and it would be a very sad day for Australia."

The government recently released draft guidelines for would-be FTTN bidders, with final guidelines expected to be published several months later. Once a winning bid has been chosen, the government will legislate to enable the fiber network to be built.

David Kennedy, analyst at industry watchers Ovum, believes that the regulatory environment is not yet up to the job of dealing with broadband deployments.

"We put billions of dollars into roads and the system to do that works very smoothly and it should do. Broadband, by comparison, has been around a very short time. The systems and institutions and structures needed to promote infrastructure in broadband are still very much in their infancy," he said.

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