TERRiA, the new name for the G9 consortium, today lodged its $5m bond with the federal government to qualify for bidding on the project.

However they still have a major hurdle to overcome and that is to bed down a financial backer for the project. The consortium members don't expect to inject substantial amounts of their own funds into the project (mainly because they dont have enough). iiNet, TransACT, Internode, SOUL and Macquarie are small players (in terms of the project) and it is only TransACT, AAPT, Primus, Soul and Optus who have any significant fibre optic (or Microwave in the case of Soul) infrastructure of their own. iiNet, Internode and Primus have invested heavily into exchange based DSL technology, but they have very little capacity (particularly Internode who is privately owned) to contribute to the five billion dollars needed [on top of the government's $5b] by the consortium.

They are a bit of a hodge-podge consortium:
  • iiNet (who recently acquired Westnet for $81m) are the third largest Internet service provider in Australia, but lease all their fibre from third parties. Just over 40% of iiNet is owned by Amcom and AAPT. Perhaps the second largest exchange based DSLAM network in Australia, second only to Telstra.

  • Internode is the darling of the Australian ISP community. A great small/medium business success story with private investment by Simon Hackett creating a national IP based Internet Service Provider. But other than exchanged based ADSL2+ DSLAMs (as opposed to MSANs which can also support voice - as opposed to VoIP), a bit of fibre around CBD Adelaide and a regional Wireless network in the Coorong and York Peninsula they dont have much to offer - other than great customer service.

  • AAPT who recently merged with Powertel, have a national transmission network (on the back of the Optus National Fibre backbone), but very little suburban based infrastructure. Most of their network is CBD based, with some metro coverage through the Powertel acquisition, certainly not enough for a deep fibre project. However for some time now New Zealand Telecom has been trying to sell off its ownership of AAPT - and no one wants to buy.

  • TransACT, a Canberra based FTTC operator who spent $500 million dollars connecting 30,000 subscribers and has been bailed out twice.

  • Primus, an interesting company who fly underneath the radar most of the time. Has some fibre in the major CBDs, MSANs installed into various exchanges around Australia. A bit of a dark horse, but certainly limited capacity.

  • Macquarie, who? No not the bank (bet the Tudehope's wish they were related though), but Macquarie Telecom a publicly listed company. Have been around since 1992 predominately as a network reseller. Voted several times as the leading Corporate Telecoms Provider. But they don't own much (if any) network infrastructure.

  • Soul who recently merged with TPG Internet to become the forth largest ISP in Australia has a significant national IP network (formally the Commindico Network) built on leased capacity from Optus and Telstra. They have a fully interconnected voice network into all 66 (or there abouts) Call Collection Areas (CCAs) across Australia and with the TPG acquisition a large exchange based DSLAM network.

  • Optus, really the only one of the consortium with the financial muscle and the network to make this bid a success. They currently pass some two million homes with HFC which could be used as the start of a FTTN/FTTH network. But does it have the backing of its parent SingTel?

Collectively these eight companies service about 1.5m broadband subscribers, but this is still a long way behind Telstra's 2.5m. They have significant overlap with their exchange based DSLAM/MSAN equipment and relatively limited coverage area with any fibre, particularly in the regions.

TERRiA has also made an announcement regarding structural separation, something to which they are strongly committed. According to Mr Michael Egan, the recently appointed Chairman of the group (and former Treasurer of NSW government):

"Over the next few weeks, TERRiA will finalise a competitive broadband model where the vested interests of individual companies are structurally separated to protect the consumer. This model will include details of board membership, management, operations, accountability and ultimate ownership. TERRiA’s member companies have a proven history of rolling out new-age networks that have brought faster speeds and lower cost broadband to Australians. TERRiA’s NBN model is designed to ensure that the new network is properly structured from the start, providing an equal, accessible and affordable platform for all users."

All sounds exciting; but are they the White Knight for the poor suffering Australian broadband user?


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