So how much has Telstra really spent on its NBN bid?

Stuart Corner
Monday, 15 December 2008 03:57

IT Industry - Strategy

Last week Telstra was talking up the investment it had made planning for the National Broadband Network. Now it has been excluded, it is telling a very different story.

In a briefing on 4 December  that was designed to reinforce Telstra's ability to undertake the task and to sow uncertainty about awarding the contract to any other bidder by emphasising the scale and complexity of the project, Telstra COO, Greg Winn said: "This is going to require the best of everything that everybody has to offer.

"The skill set required in the time and commitment for the build is extraordinary. We started on this back in 2005. We have 900 engineers who have spent the best part of three plus years working on this...The design is done, it is complete and were ready to go. We have been ready for some time."

He added that Telstra's chosen primary supplier, Alcatel-Lucent "has 1.5m person hours and a thousand engineers globally that have been dedicated to Telstra and to this architecture and the design that we have three years invested into.

On 15 December Telstra announced that it had been excluded from the NBN RFP. When asked at the announcement how much Telstra had spent preparing its NBN plans, CFO John Stanhope said: "I have not really added it up...It has been a fairly small thing...We have done a fair bit of work on it is part of the normal activities of our engineering group but the extra cost has been very low...It is not a material cost at all."

Given that Telstra's approach to the NBN RFP has been dubbed a very high stakes game, shareholders might well be justified in asking just how much of their money Telstra has gambled with.