Life on the land in Australia


Rural communities will be first

to switch on

as National Broadband Network

signs $1.5b deal

Clancy Yeates

June 2, 2011

“It’s only fitting that those parts of the country that have the poorest access to broadband should be the first up and running” … Kevin Brown. Photo: Domino Postiglione

THE company building the $36 billion national broadband network is on the cusp of ensuring more than a million premises will be connected by the next election, after a key compromise with the construction industry.

NBN Co signed two contracts worth almost $1.5 billion yesterday, clearing the way for a large-scale roll out of the network over the next two years.

One $1.1 billion deal with Ericsson will give some of the nation’s most remote households access to the network through a wireless service by the end of 2015, five years before the whole of Australia receives the NBN.

Another contract, with the construction firm Silcar, ensures about 400,000 households will be connected through fibre optic cabling within two years, at a cost of $380 million.

The acting chief executive of NBN Co, Kevin Brown, said the company was in the final stages of talks with builders to connect another 600,000 households and businesses over the next two years, and he was confident of sealing these deals in August.

The contracts follow NBN Co’s shock decision two months ago to abandon a previous construction tender process amid fears of exorbitant offers from business. The new contracting arrangement will result in NBN Co taking on greater risk to keep the costs down.

Despite the risk, Mr Brown said the deals were proof it was looking after taxpayers’ money, as it was sticking to its budget.

But the opposition communications spokesman, Malcolm Turnbull, accused NBN Co of increasing the burden on the public purse through contracts that leave NBN responsible for cost blow-outs.

”Rather than admitting it can’t meet its $12 billion construction budget, the NBN Co has locked in a short-term contract, six months after its own deadline, to ensure that it can meet at least 40 per cent of construction before the next election,” he said.

Mr Brown also discussed rural areas, as the wireless contract will connect around 4 per cent of all households by 2015. NBN Co also aims to connect a further 3 per cent of remote households through satellites by the year 2015.

”It’s only fitting that those parts of the country that have the poorest access to broadband should be the first to be… up and running,” Mr Brown said.

The Minister for Broadband, Stephen Conroy, also released advices to the competition regulator on migrating Telstra’s customers to the new network.

June 2nd, 2011

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