Telstra has placed its National Broadband Network (NBN) hopes at risk by lodging a non-compliant $5 billion bid that fails to meet coverage requirements.

The telco's bid took the form of a 12-page letter sent to Communications Minister Stephen Conroy, which urged the government to rule out structural separation.

The proposal falls short of the 98 percent coverage requirement set by government, and its fibre-to-the-node network will only serve 90 percent of Australians, despite written warnings in tender documents that non-compliant bids risk being void.

Access to the Telstra NBN will cost existing Telstra subscribers $29.95 per month for 1Mbps while a premium service will be available for downlink speeds between 25Mbps and 50Mbps for major cities and 12Mbps and 20Mbps for remote coverage areas.

Some $20 billion will be invested into Telstra's NBN over five years and its construction and operation will create up to 4000 jobs. Telstra said its NBN is “essentially an upgrade” of its existing networks.

The company reiterated in its letter to Minister Conroy “there is no prospect of agreement being reached if separation is not ruled out as an objective of government”.

Optus — supported by the Terria consortium — has submitted a 1000 page bid through the Optus Networks Investments (ONI) entity.

Telstra, unlike the Terria and Acacia groups, will not seek legislative protection against potential rival national fibre networks, however it wants the government to review the 12 month negotiation period requirement and guarantee protection of its sensitive network information which was handed to bidders to construct proposals.

The Optus-Terria bid will cost about $15 billion and will provide more than 1000 wireless stations and 100,000 km of fibre.

Both Telstra and Terria will begin fibre deployment in under-served broadband regions.