It falls 8% short, but Conroy accepts Telstra’s NBN bid

At 12 pages and almost 1000 pages less than Optus-led Terria bid, Telstra’s proposal to construct the National Broadband Network will be considered for the $4.7 billion project, Communications Minister Stephen Conroy said on Wednesday.

Under Telstra's proposal to build the NBN, company chairman Donald McGauchie said it would invest up to $5 billion of its own capital and deliver a network capable of providing download speeds between 25Mbps and 50Mbps in 65 percent to 75 percent of the country, with speeds of between 12Mbps and 20Mbps in the remainder of the footprint.

Unlike the government request for 98 percent cover of the population, Telstra’s proposal will cover only 90 percent which, according to tender documents, constitutes a non-compliant bid.

“Telstra's proposal will be considered in exactly the same way as all of the other five proposals,” Conroy said yesterday evening.

When asked specifically about whether the 98 percent coverage requirement is negotiable, Conroy did not offer any specifics.

“This is an objective. There are 18 objectives against which these proposals will be judged.”

Earlier in the day McGauchie told the media that he had written to the communications minister with a proposal to build a “world class” open-access national broadband network.

“The proposal outlines what would be achieved by the fully detailed bid Telstra has prepared, but which we could not submit due to a number of unresolved issues in the governments request for proposals,” he said.

According to Telstra, a number of fundamental issues have not been resolved, including the lack of clarity around possible further separation; the 12-month negotiation period under the Request for Proposal; concerns about the use of Telstra’s detailed information; and the proposed commercial terms issued by the Commonwealth.

"Each of these unresolved issues causes unacceptable risk at a time of significant economic uncertainty, resulting in the Telstra Board deciding it is not in the interests of shareholders for Telstra to put forward a fully detailed bid at this time," according to Telstra.

Conroy said the next stage of the process is that the expert panel will assess the bids against the 18 objectives that were in the RFP. They will then make a recommendation to the government at the end of January.

“Then the final stage of the process will be obviously our consideration of those recommendations from the expert panel,” he said.

However, he refused to speculate about the validity of Telstra bid.

“I'm not in a position where I can negotiate with any other individual bidders while the expert panel process is going on,” he said. “I'm not in a position that I'm going to be involved in those discussions between the proposers and the expert panel.”

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