Australia's largest telecom company, Telstra, will bid for the $15 billion government-sponsored national broadband network project before the 12 pm deadline today, even as the Australian government refused to provide guarantees on Telstra's future structure.

After months of threatening to pull out of the tendering process unless the government removed the condition for a structural separation of its broadband network infrastructure from the retail arm, the Telstra boards finally decided to bid for the tender. Telstra is jointly making the bid along with rivals Optus-led Terria consortium and Canadian company Axia Netmedia.

Telstra's rivals, too, had demanded that Telstra should be forced to separate its network and retail arms if it wins the tender to build the network to ensure more competition and better prices for consumers.

Telstra chairman Donald McGauchie said in the company's annual general meeting in Melbourne that the proposal would not make commercial sense unless the government guaranteed not to force structural separation now or in the future, as part of the deal.

With the 12 pm deadline approaching today and the government not budging, Telstra had no choice but to announce that it is ready to bid and build the network. Telstra, however, will ask for government guarantees on structural separation if it wins the tender.

Telstra public policy and communications head, David Quilty said on Tuesday that the company was ready to bid and, unlike its rivals, it had the financial muscle and the expertise to execute the country's most important infrastructure project.

He maintained that structural separation still remains the main stumbling block to the Telstra bid.

The national broadband network was one of the main election promises made by the government where it will contribute $4.7 billion and ask private telecom companies to join in as a partner wherein they bid for the project which is estimated to cost about $15 billion.

The project involves laying a fibre optic cable network to 98 per cent of Australia by replacing the old copper cable with high speed fibre optic cable and Telstra has a commercial advantage over its rivals as it owns the exchanges from where the existing copper wires are to be replaced.

The projects other bidder, Axia, also has the expertise as it has built huge fibre cable networks in Singapore, France and Canada's Alberta province, and it has been insisting that structural separation of the network is essential for competition.

Chief executive of Axia, Arthur Price, had told the Australian senate committee that it was essential that the structural separation of Telstra's network was sought for competition as nowhere in the world does one advocate the telecommunications industry competes with the customer.

Questions are being raised on the source of funding of the other main bidder, Optus, led Terria consortium, which had not revealed its financial backers. Optus spokesman Maha Krishnapillai said the company is fully backed by its parent company Singapore Telecommunications.

He also claimed that his company has sufficient funding to build the network and that it has the backing of SingTel and its board. He said his company wants Telstra to bid as it cannot force or blackmail the government to guarantee separation.

The government had planned to finish the tendering process for the project by June this year and to commence work by the end of 2008. This will now be delayed and may not start until the end of 2009.