Telstra to bid for $15 billion Australian telecom project

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.