Optus/Elders $1b broadband deal signed

Stuart Corner
Sunday, 09 September 2007 13:58

Business IT - Networking

The Government has signed its $1 billion funding deal with the Optus/Elders consortium, Opel for the rollout of broadband services in regional Australia, despite communications minister Helen Coonan still battling a legal challenge from Telstra over the process by which Opel was selected.

There were reports in the press at the end of August that the minister had been advised by the Government's lawyers not to sign the deal because of the ongoing legal challenge. The Sydney Morning Herald reported that "Industry insiders have told the Herald that the minister and executives from the Opel consortium were due to sign the funding deed for Broadband Connect on Wednesday [29 August], but pulled out at the eleventh hour after receiving advice from the Government's lawyers." It added that the minister was likely to seek more legal advice about the implications of Telstra's court case.

Subsequently Coonan hit back at Telstra's legal challenge by demanding that Telstra hand over "thousands of secret emails and documents belonging to CEO, Sol Trujillo...including board minutes," according to a report in The Australian last week. Telstra objected, describing the move as "oppressive," but the court thought otherwise and ordered Telstra to hand them over.

At a three day hearing starting this week the court will decide whether Telstra can gain access to Government and DCITA documents relating to the bid.

Announcing the signing of the contract on 9 September, Coonan made no reference to the legal case saying: "this funding agreement captures all the service commitments I announced with the prime minister on 18 June 2007 and provides the foundation for a new $1.9 billion competitive broadband network that will deliver services over 638,000 square kilometres."

She claimed that Opel had already commenced work on the network, which is targeted for completion by June 2009, and "The government will independently test the network to ensure that coverage is achieved to a very high standard, and that the service in rural and regional areas is comparable the standard obtained in metropolitan Australia."

She added: "In tandem with this agreement, Elders and Optus have also entered into a joint venture agreement which has committed them to contribute assets and investments of over $900 million to establish Opel Networks...[as] a structurally separated 'wholesale only' company that will operate and maintain the network, and that will sell services on a transparent and equivalent basis to parent entities Elders and Optus, and to any other broadband provider in the market."