nbn deal done ...

... US firm’s $620m NBN satellite win ... ....
... PUBLISHED: 08 Feb 2012 PRINT EDITION: 08 Feb 2012
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... A US firm has been awarded a $620?million deal to provide high speed internet for 200,000 of Australia’s most remote premises.

The Australian Financial Review understands California-based firm Loral Space and Communications will deploy two satellites dedicated to beaming high-speed internet to residents and businesses by 2015.

The Loral deal is the latest of many contracts awarded to foreign firms and local satellite providers are set to be disappointed.

Sources close to negotiations said the deal is set to be announced today in Canberra by Communications Minister Stephen Conroy after markets open in the United States.

Of the 13 million premises set to be plugged into the $35.9 billion national broadband network by 2021, some 93 per cent will get fibre to the home and 4 per cent will get fixed wireless services.

The remaining 3 per cent of premises in extremely remote areas too expensive to connect with those technologies will have satellite connections.

The two KA-band satellites will be capable of delivering peak download speeds of 12 megabytes per second and the $620 million will come on top of the $300 million awarded to Optus and IPSTAR for interim services.

Other major tenders awarded by NBN Co to overseas companies include $1.1 billion to Swedish network giant Ericsson to build a fixed wireless service and up to $1.5 billion for French firm Alcatel Lucent to provide equipment.

Listed firm NewSat, which is set to launch its Jabiru-1 satellite with newer technology in 2014, had claimed it could provide faster speeds to more Australians at lower prices.

Despite signing up a range of high-profile customers, NewSat was not able to get into NBN Co’s short-list of satellite providers.

NewSat vice-president of marketing Merv Kuek said it was frustrating that local firms like his were being ignored despite a solid track record of overseas wins.

“Our biggest customers are ... the US armed forced in Iraq and Afghanistan, we have a few services for the Australian Defence force and we also do a bunch for oil, gas and mining companies including Gorgon,” he said. “So it’s interesting the Australian government doesn’t support us.

“By comparison we’ve had US and French banks working very closely with us because they understand the value of the project.”

But a source close to the negotiations said Australian firms could not be used because the tenders required companies with extensive experience building and operating satellites.

While this will be the largest satellite-related contract that will be announced, more deals will need to be signed for the ground operators as well as the launch partner.

French firm Arianespace, which launches rockets from French Guiana near the equator, is understood to be the front-runner to put both satellites in space.

The AFR contacted NBN Co and the office of Minister Conroy, but both declined to comment.

The Australian Financial Review
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