The Opel Networks broadband plan will not proceed. Opel Networks' implementation plan, submitted to the Australian government on 9 January, failed to meet the terms of a contract made with the previous government. The previous Australian government executed a AUD 958 million funding agreement with Opel Networks, a joint venture between Optus and Elders Telecommunications, for the provision of a broadband network covering under-served areas across regional Australia. The Rudd government publicly committed to honouring the contract between the Commonwealth and Opel. A condition precedent of the contract stated that Opel would provide coverage reasonably equivalent to 90 percent of under-served premises identified by the then government as being within its coverage area.
However, analysis shows that the network would cover only 72 percent of the identified under-served premises and does not satisfy contract conditions. Subsequently, the contract has been terminated. The new government has committed up to AUD 4.7 billion to build a high-speed, open access, fibre based national broadband network. The new network will deliver minimum speeds 12 Mbps to 98 percent of Australian homes and businesses. The remaining 2 percent will continue to receive support through the government's AUD 95 million investment in the Australian Broadband Guarantee.
The joint venturers, Optus and Elders, maintain that all conditions precedent to the funding agreement have been satisfied. The Opel network was capable of meeting the objectives of the government's Broadband Connect Infrastructure Programme and delivering improved broadband services to 889,322 underserved premises in rural and regional Australia within 2 years at metro-comparable prices. Optus said in a statement that it believes the government used flawed data. Optus will now write off the capex of AUD 9 million in the programme in the quarter ending 31 March.
Telstra welcomed the decision by the new government. Telstra has long argued that the Opel plan was flawed and would not increase the availability of broadband access in rural and remote Australia. As a result of today's announcement, Telstra's legal proceedings to access documents relevant to the previous government's decision on the Broadband Connect tender will now come to an end.
Pay-TV provider Austar expressed its disappointment with the government's decision to terminate the contract. Austar also participated in the tender for the contract but after failing to secure the contract, signed cooperation agreements with Opel. The announced sale of Austar's 2.3GHz and 3.5GHz spectrum to Opel will not proceed.
