NBN: Analysts, industry divided on consortium speculation

The NBN could go to a national bidder and one or more state-based bids, but analysts are skeptical of reports suggesting the government will cherry pick the best elements of all bids.

Speculation that bidders for the National Broadband Network (NBN) tender may be asked to form a consortium has met varied opinions from analysts and telco players.

Layer 10 Communications founder, Dr Paul Brooks, told ARN he wouldn’t be surprised if the various proponents hadn’t considered such a move.

“It’s entirely possible that a mainland bidder could be asked to form a consortium with the state-based bidders in Canberra and Tasmania for them to do their territories and for the national group to do the rest,” Brooks said.

However, he said it was unlikely as conflict could arise over technical details like cable length and distances, transmission powers, choice of technology and vendors, in addition to funding issues.

“On a geographic basis where each party has their own geography to look after and there is not the requirement to modify the design based on decisions made by other parties within the consortium, then that may work,” he said.

Competitive Carriers Coalition (CCC) executive director, David Forman, however, said he expected and hoped the government would look to combine the best elements of all the bids.

“We at the CCC have advocated from the start that bidders should be encouraged to work together, and it was clearly necessary for this to occur under the government’s process because they allowed for regional bids. These bidders need to be able to work in conjunction with bids covering other regions at the very least,” he said.

Forman claimed this would result in the best technology fit in each location with a variety of fixed and wireless technologies, and maximise Fibre-to-the-Home (FttH/FttP) being deployed.

But telco research firm Market Clarity CEO, Shara Evans, agreed with Brooks that a consortium on a state-by-state basis would be more workable.

“If you take commercial bidders who are rivals and say ‘we want you to collaborate together and come up with the best of the best’, then you will have all kinds of vested commercial interests that will cause conflict and the proponents may not be willing to share network build or design plans with their competitors,” she said.

“It certainly could go to one national bidder and one or more state-based bids, but if you take significant parts of a bidder’s offer the whole bid would have to be re-evaluated in light of the bits taken out to see whether it impacts their commercial business case for other areas.”

ICT service provider Telarus managing director, Jules Rumsey, agreed that a consortium offering a mix of wired and wireless technologies would require either re-starting the bidding process, or at least allowing existing bidders to re-evaluate their bid to accommodate changes.

“Requiring the various bidders to form a consortium rather than allowing them to demonstrate what they could offer individually if aware of such changes is not likely to provide the best outcome,” he said.

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