Australian telecommunications giant Telstra has slammed the government's closed-door approach in deciding the builder of the biggest infrastructure project in Australia's history.

''Telstra was ready to assist the government with its $9.4-billion national broadband network (NBN) tender process, although we have not been asked to do so,'' Telstra chairman Donald McGauchie told a Sydney conference.

He said the process of deciding the builder of the biggest infrastructure project in Australia's history, had been done ''behind high walls, without consulting the company that owns the network that is being upgraded''.

"We simply have to take on trust that the government is fully informed about the critical technical and operational issues and the national security risks entailed in the NBN before it makes its final decision."

The NBN is a massive and highly complex upgrade of Australia's fixed line network which Telstra owns and operates. The network will provide a pathway for old and new media platforms combined, an array of innovations that is constantly expanding, all to be delivered to 98 per cent of Australian homes and businesses. It involves more than 200,000 kilometres of cable.

The SingTel Optus-led consortium is favoured to win the broadband bid, though some suggest just because it's Australian, a new and well-backed Melbourne shelf company Acacia headed by former Telstra executive Doug Campbell is an outside chance.

Stephen Conroy, broadband and communications minister, said on 12 March that NBN will be one of the largest infrastructure projects ever undertaken by any Australian government.

''The broadband network will revolutionise information communications technologies, commerce, education and the provision of health care, particularly for regional centres,'' he said.

The winning tender is expected to be announced by the communications minister Stephen Conroy and prime minister Kevin Rudd by 7 April.

Telstra, the nation's largest telecommunications firm by revenue and subscribers, was excluded from the tender process in December. (See: Telstra booted out of $15-billion Australian telecom project).

The federal government's decision on who will build a multibillion-dollar national broadband network is nothing short of disaster for the former government-owned monopoly. But, analysts argue that the government, which holds 16 per cent stake in Telstra through the Future Fund, can't afford to lock Telstra out of the process.

''It is the most ambitious project of its type ever contemplated anywhere in the world and will require assumptions that we are very concerned that some of the proponents will have little chance of getting right,'' McGauchie said.

The problem for analysts now is forecasting what Australia's $36 billion telecommunications market will look like once Telstra loses its wholesale monopoly to a newcomer who will need the co-operation of Telstra and its shareholders to survive.

Since deregulation of telecommunications in 1997 the level of capital investment in the industry had fallen below other sectors of the economy. Prior to deregulation, capital investment in the industry had outpaced investment in other sectors.

''Investment is simply not forthcoming under the current telecommunications regulatory regime,'' he said.

''The bulk of the capital expenditure that is occurring is in the less regulated areas where competition is flourishing,'' McGauchie said, adding that investment is not happening in the fixed line market.

The chairman also announced a A$42 million investment in installing an extra 141 Next G mobile base stations across Australia, as well as the upgrade of 421 regional Telstra exchanges.

Telstra closed down 12 cents at A$3.09 on the Sydney Stock Exchange. Its main rival SingTel, parent of Optus, closed down 2 cents at $2.41.