Pricing could stall Broadband program

The Communications Minister, Stephen Conroy, wants to choose a contractor for a domestic fibre-optic web, offering nominal speeds of 12 megabits a second - by June, allowing for building to start by the conclusion of this year.

The Government has proposed outlay $4. 7 billion as region of a public-private partnership but Telstra has opposed taking region in a multilateral venture. Pressure is building on the Government to issue the details of a framework for a web so that companies can present bids by June.

An ABN Amro telecom analyst, Ian Martin, said that although the Government might discover a manner to make without a multilateral venture, it would baulk at the cost of $80 to $90 per month per cable that Telstra would need to accuse its competitors for approach to the web. "We wear't view sufficient popular soil between the Government and Telstra on approach prices for this matter to be resolved this year," Mr Martin said in a study.

"We don't see enough common ground between the Government and Telstra on access prices for this issue to be resolved this year," Mr Martin said in a report.

"Unless the Government baulks on … broadband access price (which seems to us unlikely) we are likely to be in the same place with respect to a high-speed broadband roll out in 12 months as we are now, and maybe for the next two to three years," he said.

ABN Amro said the status quo suited Telstra because of the cash flow it generated from existing fixed-line and broadband services.

Merrill Lynch also believes a start date will be delayed until mid-2009 because "disagreement with Telstra over pricing makes the current timeline impractical".

The agent believes the fibre-optic web, an important matter in the original Government's schedule, will go five years to construct. Some analysts think Senator Conroy will permit Telstra to end its territorial CDMA mobile telephone web on January 28. The shutdown has caused dismay among nation customers who are concerned the successor NextG web is substandard.

We wear't think this is such a leading matter for the Government that it would receive a showdown with Telstra, Mr Martin said. Senator Conroy has said the Government will not permit Telstra to shift away the CDMA web until the reporting on NextG is at least as better. He is payable to have a resolution on Monday.