NBN Co signs with Ericsson, Silcar

Telecommunications vendor Ericsson and construction firm, Silcar are the major beneficiaries of two NBN Co contracts awarded this week.

NBN Co has signed up Ericsson to a 10-year, $1.1 billion contract to build and operate its 4G LTE fixed-wireless network for the seven per cent of Australians not getting access to other National Broadband Network (NBN) services, such as optic fibre.

The telco aims to have 93 per cent of Australian premises connected via fibre while wireless broadband will be used to reach another four per cent, and the remaining three per cent will be served by satellite services.

The fixed-wireless network and NBN Co’s satellite service were designed to offer speeds of 12 megabits per second (Mbps) at national wholesale access prices of $24 a month to retail service providers to offer people living in premises not covered by fibre.

NBN Co head of corporate services, Kevin Brown, said that it was not looking to replace any other networks.

"The existing copper network and 3G networks from other carriers will still be in place in these locations," said Brown.

"We have 121 points of interconnect and 45 will be used for the wireless networks.

"While wireless spectrum is shared between users, unlike a mobile network, fixed-wireless will allow us to plan a network for a more predictable number of users in a given area.

"This gives us greater consistency in the speed and quality of service the NBN Co network will provide to each user.”

NBN Co announced in February that it had acquired wireless spectrum from Austar to meet most of its needs for the fixed-wireless services.

However, spectrum was still to be acquired for WA and the Northern Territory.

The Australian Communications and Media Authority (ACMA) has initiated a public process for the allocation of spectrum in those locations that would be suitable for fixed-wireless services.

"Satellite and wireless are just two of the building blocks that need to be put in place to deliver a truly national broadband network," said Brown.

"Another critical rollout was the fibre optic cable so we have reached an agreement with construction firm Silcar."

Silcar was part of a tender shortlist scrapped by the NBN Co in April this year due to "unacceptable" tender prices. The shortlist, which included Telstra, Transfield and Silcar, was whittled down from an initial list of 45 bidders.

"As you aware we have been involved in a long and difficult tender process with construction companies, a process we suspended when it became clear we were not going to deliver the construction of the network within the precise range of our corporate plan," Brown said.

"At that time, we were criticised for stopping the tender. I did say at that time we would follow a different path and get better value for money."

The contract for construction was worth $380 million over the next two years, with the option of a further two years at an additional value of $740 million.

It covers Queensland, New South Wales and the ACT and according to Brown, represents almost 40 per cent of national construction activity planned over the next two years.

The agreement covers nine of the 19 NBN second release sites as well as extensions to existing works in Kiama, Townsville and Armidale, and new sites in Springfield Lakes, Toowoomba and inner northern Brisbane, Riverstone in western Sydney, Coffs Harbour, and Gungahlin in the ACT.

"Importantly, the design and construction pricing in the Silcar agreement is in line with NBN Co’s corporate plan," Brown said.

The final contract will be concluded by 17 June 2011.

Follow Hamish Barwick on Twitter: @HamishBarwick

Follow Computerworld Australia on Twitter: @ComputerworldAU

Copyright © 2011 IDG Communications, Inc.

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