Australia commits to $15bn broadband rollout

Prime Minister Kevin Rudd

CANBERRA - The $A15 billion national broadband network will be constructed by a joint public-private company, the federal government has announced.

The project has been described as the biggest infrastructure undertaking in Australia since the Snowy Mountains Hydro-Electricity Scheme.

The announcement was made by Prime Minister Kevin Rudd during a jount press conference with communications minister Stephen Conroy and finance minister Lindsay Tanner in Canberra.

Rudd described the announcement as "historic", describing broadband as the core of 21st century infrastructure.

The network, described as the single biggest infrastructure project in Australian history, will be built in partnership with the private sector.

Private sector investment in the new network will be capped at 49 percent.

Not one of the private consortia tendering for the multi-network met the government's requirements, Rudd said.

The Acacia consortium, comprising wealthy businessmen and telco veterans, had been regarded as frontrunner for the project ahead of Optus and Canadian telco Axia NetMedia.

The nation's largest telco, Telstra, was excluded from consideration after it failed to meet tender guidelines.

But it will be invited to take part in the new process, Senator Conroy said.

The new company will invest up to A$43 billion in the network over eight years.

The government will make an initial investment of A$4.7 billion in the company but intends to sell its interest within five years after the network is fully operational.

Rollout of the network is expected to start in early 2010.

The new network will deliver fast speed broadband to 90 per cent of the country through optical fibre.

The service would be up to 100 times faster than that presently available, Rudd said.

"It will connect all other houses and business in Australia with next generation wireless and satellite technologies that will deliver broadband speeds of 12 mega-bits per second," he told reporters.

Building the network will take seven to eight years, Rudd said.

Tasmania will be the first state to benefit with work expected to start mid-2009.

"Every person and business in Australia, no matter where they are located, will have access to affordable, fast broadband at their fingertips," Rudd said.

- AAP