IHS Global Insight Perspective | |
Significance | The government has appointed Nextgen Networks to implement the project. |
Implications | The project is aimed at immediately addressing the lack of competitive backbone infrastructure throughout remote areas of Australia. |
Outlook | The programme is part of the government's plans to roll out a National Broadband Network, details of which have yet to be finalised. |
The Australian government has announced that it is investing up to A$250 million (US$228 million) to provide transmission links to a number of regional centres where there is a lack of competitive backbone infrastructure. Minister for Broadband, Communications, and the Digital Economy Senator Stephen Conroy, announced that Nextgen Networks had been selected to roll out approximately 6,000 kilometres of backbone infrastructure across five states and the Northern Territory under the Regional Backbone Blackspots Programme. Nextgen Networks, owned by Leighton Holdings, will also operate and maintain backbone transmission links for an initial five-year operational period. Project activities will commence immediately and the construction of all the links is expected to take approximately 18 months.
Commenting on the project, Conroy said that the new regional backbones were the first building blocks of the government's planned National Broadband Network (NBN) infrastructure and would stimulate competition and improve broadband service provision across regional Australia. As details of the NBN project are yet to be finalised, the government is taking measures to address regional backbone "blackspots" through the immediate roll-out of fibre-optic transmission links connecting cities, major regional centres and rural towns, in order to deliver improvements to broadband services in the short term. To facilitate competition, the new backbone transmission services will be offered on open and equivalent terms and conditions to ensure equal access for service providers.
Outlook and Implications
The commencement of the Regional Backbone Blackspots Programme comes at a time when the government has yet to decide how to implement the A$43-billion NBN project. The government has established NBN Co. to build and operate the network, with an initial investment of A$4.7 billion to be committed to the network. An implementation study is due to be completed by February next year to determine the network's operating arrangements, detailed network design, and ways to attract private-sector investment. NBN Co. is also looking at all options for potential acquisitions that could kickstart the NBN project. Telstra, SingTel's Australian unit Optus, and Canada's Axia NetMedia have indicated they may be interested in participating in the broadband project, potentially by selling their existing assets into the new network in exchange for equity (see Australia: 19 October 2009: Australia's NBN Co-Evaluates Acquisition Opportunities). Telstra has been seen as the most likely candidate to sell large parts of its fixed network to NBN Co, as the new fibre network will eventually leave large parts of Telstra's copper network redundant. However, the government and Telstra have yet to resolve the issue of a possible structural separation of Telstra, as the authorities seek to legislative changes to facilitate the NBN project (see Australia: 15 September 2009: Telstra Faces Renewed Government Call for Structural Split).