Oz government plans to build out own fibre network

The Australian government has solved its differences with the country’s operators, which were vying to build out a national broadband network, by proposing to undertake the A$43bn task itself.

On Tuesday morning the Rudd government announced plans to establish a new company, in which it would be the majority shareholder, to build and operate the next generation broadband network. Naturally, significant private sector investment is expected.

The proposed network, which will cost A$43bn and take eight years to build, promises to connect 90 per cent of all Australian homes, schools and workplaces with fibre, delivering speeds up to 100Mbps, and to connect the remaining 10 per cent of premises with wireless and satellite technologies.

The project will also directly support up to 25,000 local jobs every year, on average, over its lifetime.

The announcement came just as the government was expected to announce the winner of a long running tender to build said network.

Late last year, incumbent Telstra and its biggest rival Optus lodged bids for the rollout of the nationwide network. The bids marked the next stage of a multi-billion dollar investment in the country’s infrastructure that has been continually delayed by political wrangling. But more delays lay ahead, with Telstra putting the ball back in the government’s court by submitting a non-compliant proposal for the build out.

A controversial aspect of Telstra’s proposal was that the company’s bid was tied to assurances that the government will seek no further separation of the operator. Telstra’s rivals, including Optus, have been calling for the government to split Telstra’s network business from its retail and wholesale arms in a bid to promote competition.

In February, Sol Trujillo, the colourful frontman of Telstra, announced plans to step down on June 30 and return home to the US.

Trujillo did not give a reason for his departure, but his four year tenure as chief executive of Telstra has been marked by controversy, mainly over the country’s proposed nationwide network. The Telstra CEO has continually butted heads with the Australian government regarding plans to roll out a next generation broadband infrastructure.