Telstra accuses Optus of NBN non-compliance

After drawing criticism for submitting an incomplete NBN bid of its own, Telstra fires a few rounds at Optus claiming it is now failing to adhere to the NBN rules

Telstra (ASX: TLS) has accused Singtel Optus (ASX: SGT) of failing to make financial disclosures to the ASX regarding its source of funding for the National Broadband Network, just days after its own lack of compliance with the tender process.

“The disclosure rules are clear – if Singtel Optus has made an actual, material commitment of capital to the NBN, then it needs to be disclosed to the ASX,” Telstra said in a statement.

The accusation comes just days after Telstra caused a stir itself by not adhering to the tender rules when it submitted a 12 page bid – compared to Singtel Optus’ 1000 page proposal – that Communications minister Stephen Conroy indicated would be accepted and thrashed out by the expert panel tasked with evaluating all bids.

Telstra’s pseudo-bid attracted criticism from telco analysts for being incomplete, failing to meet coverage requirements, and touting outdated broadband prices for the new network.

“Yes it is a bid, albeit very light on detail and non-compliant with the stated goals of the original RFP document,” said Dr Paul Brooks, founder of telecommunications and next-gen network consultancy, Layer 10.

“Normally, a bidder for a tender attempts to put as much information forward up-front, and then the subsequent clarifications are largely incremental information. Telstra have taken the opposite path,” he said.

When lodging its proposal, Telstra said it clearly disclosed its intentions to the ASX, including its desire to commit $5 billion in capital to the project if the “required enablers” are put in place – namely a guarantee of the regulatory framework and protection from structural separation.

“If Telstra gets all the concessions they have asked for, then for other ISPs it would result in a continuation (at best), or a worsening of the stranglehold that Telstra has at the moment,” Brooks said.

Telstra said because Optus has not made any such ASX disclosures it has therefore not made any financial commitment of its own capital to the NBN project.

“With a bid cost of $15 billion and a maximum government contribution of $4.7 billion, this means there is a $10 billion funding hole in the Singtel Optus proposal,” Telstra said.

Telstra added that Singtel Optus is looking like a “sub-prime NBN bidder”.

IBRS analyst Guy Cranswick said he believed when it came to funding Optus would be in a more difficult position than Telstra.

“Their CFO was articulating some concerns about the financial strength of bidding and what the debt versus return equation will mean over the years ahead,” Cranswick said.

“The biggest thing to face at the moment is the deteriorating worldwide economic conditions and the cost of money…The real issue is the money put at risk to invest over a long period of time. The cost of money is still tight and if we can believe what the Prime Minister said in parliament this week Australia will probably take a bit more of a soaking.”

ARN understands that Optus has submitted a fully compliant NBN bid with all required financial information.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags NBNTelstrasingtel

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?