Australia, April 8 – In a surprise move Tuesday, the Australian Government announced its plans to back a $43 billion national high speed broadband network investment. Rudd’s Labor Government said that it will set up a majority-owned private company to build the fiber-to-premise network..

Investments will be coming from the public-private sector. All telecommunications groups – including national telco giant Telstra Corp – can participate in the new network. The private sector can hold up to 49% of the new company.

The government plans to fund its investment in the company. It’s stake will be sold within five years of completion, when the network becomes fully operational. It will be sold down via the government’s Building Australia Fund. Later on, it will sell through the issuance of the Aussie Infrastructure Bonds that will allow households and institutions to invest in the network.

“It’s time for us to bite the bullet on this. The initiative announced today is a historic nation-building investment focused on Australia’s long-term national interest,” Prime Minister Kevin Rudd said. “Absent taxpayer investment in the corporation, this technology could not be laid out,” he adds.

The new network is expected to reach 90% of the Australian population by 2018. According to Rudd, those not served by the FTTP network will be served by wireless technology.

Canberra had initially called for proposals to build a fiber-to-the-node network, which delivers optical fiber to street boxes. It decided to go with the FTTP network instead. This bypasses Telstra’s copper network and is easily upgradeable. The scheme would be the largest infrastructure project in Australia’s history, Rudd said.

The new network will be capable of reaching speeds of up to 100 megabits per second –100 times faster than speeds currently on offer, said the government.

The Australian government is targeting construction in early 2010, with the network to be rolled out simultaneously in city, regional and rural areas. It will start a study to determine the operating arrangements, detailed network design and ways to attract private-sector interest.

The government also expects the investment to create thousands of new jobs. The new network is expected to support 200,000 jobs and bolster the faltering economy. The timing is perfect as it comes at the point when the country teeters on the brink of a recession that is expected to continue increasing the unemployment rate to over 7 percent next year.

Source:
UK Reuters