Rivals can't follow Telstra's map

PROGRESS towards the federal Government's circa $10 billion fibre network is likely to be delayed while Telstra is told to improve the details on its existing network map.

Communications Minister Stephen Conroy clearly wants to have a competitive tender in time to get the network build started before the next election

Communications Minister Senator Stephen Conroy is expected to delay the June 25 deadline for submission of tenders to give rivals a chance to see the updated information.

The main concerns relate to information on networks in rural and remote areas.

Operating on leaked information, the rival G9 network has been critical of the quality of the Telstra network map.

It is unlikely the Government will accede to G9's request for a five-month delay.

Conroy clearly wants to have a competitive tender in time to get the network build started before the next election.

The federal budget papers made clear the ACCC will play a key role in the network tender, and after the network is built. Conroy has said the same in past speeches.

Optus boss Paul O'Sullivan yesterday made it clear G9 would lodge a tender and in the past has said the fibre network worked with returns of 10 to 12 per cent, compared with Telstra's 18 per cent-plus.

O'Sullivan submitted to his parent company board plans to sue the Government to recover the $20 million in costs incurred on the failed Opel tender.

Conroy axed the planned $1 billion subsidy for a rural wireless network earlier this week and the move not only made good policy sense, but was one of the key money-saving features in this week's budget.

For O'Sullivan, who had to explain to his board the loss of a $1 billion handout, the issues are a bit different and he would be keen to draw a line in the sand in Canberra even if he risks exposing internal documents on the proposed rural network.

The legal action shouldn't affect his progress on the broadband bid.

Macquarie Bank, which is being advised by former senior Telstra executive Ted Pretty, will lodge a tender for the network build with Leighton and is likely at some stage to join with Optus.

The same doesn't apply to Deutsche Telekom, which is apparently not proposing to invest money in the venture but instead to be the operator of an independent network.

Optus's fourth-quarter profit figures released yesterday showed signs it is back on the attack.

Telstra likes to say it is the only one that invests in Australia, but the facts show Optus has invested $1 billion a year and while its parent has more exciting opportunities outside Australia, there are no real signs that capital is being withheld.

Last year Optus grew free cash flow by 21 per cent, while the parent company grew it by 27.9 per cent.

Revenues for Optus grew by 3.8 per cent against system growth of 4.3 per cent and Singtel growth at 11 per cent.

The big positive was the first annual increase in earnings before interest tax and depreciation in three years, even if at 0.7 per cent it was much slower than the 5.8 per cent for its parent company.