re: Ann: National Broadband Network Telstra P... Bonza, havent...

re: Ann: National Broadband Network Telstra P... Bonza, havent seen the ann yet - but just pulled this off the SMH... Cheers DL

http://business.smh.com.au/business/telstra-lodges-lastminute-broadband-bid-20081126-6i3r.html

Telstra lodges last-minute broadband bid

Matt O'Sullivan, November 26, 2008 - 12:06PM

Telstra has eaten humble pie today and lodged a bid to build a $15 billion-plus national broadband network, temporarily ending a high-stakes game of brinkmanship with the Rudd Government.

After months of threatening to walk away from a government tender if its demands were not met, Telstra's board gave its final approval at an emergency meeting this morning to bid for up to $4.7 billion in taxpayer funding to build a network reaching 98 per cent of the population.

Telstra said today "it was ready to commit $5 billion" to a network."

The Communications Minister, Stephen Conroy, has repeatedly refused to bow to Telstra's demand for assurances that the project will not lead to a split of the dominant telco's business.

Telstra's decision today is a major backdown for the company chaired by Donald McGauchie, who has upped the pressure on the Government in recent weeks.

But the U-turn will be a huge relief for the Federal Government because the planned network is a key plank of its first term in office. A tender without Telstra at the negotiating table would have left the Government's plans in disarray because the telco is seen as the most likely winner.

The tender is already running months late and a decision on who wins the right to build the network is not expected until at least March. The Government has put a five-year time-frame on the project.

With the Government injecting up to $4.7 billion, the successful bidder will have to provide the rest for a project estimated to cost more than $15 billion.

Other bids to build a network providing minimum speeds of 12 megabits per second have been lodged by an Optus-led Terria consortium and a Canadian telco, Axia NetMedia. Acacia, a group led by prominent Melbourne businessman including Solomon Lew, is also submitting a national proposal.

State and territory proposals will be made by the Tasmanian Government and TransACT.

Optus has not submitted a separate bid despite lodging a $5 million bond with the Government in May.

Up for grabs is $4.7 billion in Government funding to build the network. The successful bidder would have to provide the rest for a project estimated to cost between $10 billion and $15 billion.

An expert panel including the investment banker John Wylie, the Allphones chairman, Tony Mitchell, and a former chairman of the Australian Communications Authority, Tony Shaw now has up to two months to make a recommendation to Senator Conroy.

Citi analysts have estimated up to $10 billion could be wiped from Telstra's market value if it had decided not to compete for the network build a scenario that would have left in tatters the promise of its chief executive, Sol Trujillo, to transform the telco by 2010.

Mr McGauchie told Telstra shareholders on Friday that structural separation "means there will be no business case'' to build a national broadband network. He said a split of its business would "wipe out jobs'', significantly increase costs and dent productivity.

"We have made it very clear that unless the risk of separation is removed, this company is not in a position to bid,'' he told Telstra's annual meeting in Melbourne.

The deadline for bids closed at noon today.

SMH