UPDATE: Corning Wins A$1.2 Billion Contract For Australian Broadband
17 Janeiro 2011 - 6:03AM
Dow Jones News
U.S. optical fiber maker Corning Inc. (GLW) has won the first
major contract for the 36 billion Australian dollar (US$35.6
billion) national internet broadband network project that the
government hopes will improve broadband speed ascross
Australia.
Australian government-owned NBN Co. has awarded three equipment
contracts for network infrastructure over the next five years with
the largest--up to A$1.2 billion--going to Corning. Italy's
Prysmian SPA (PRY.MI) and Melbourne-based Warren & Brown
Technologies won smaller orders worth up to A$300 million and A$110
million, respectively.
Australia's largest infrastructure project is planned to reach
over 13 million homes and businesses within 10 years, and will
boost technology companies like Apple Inc. and Sumsung Group, whose
popular gadgets are hobbled by poor internet connectivity outside
the country's cities.
"This is a very significant day for NBN Co.," said Mike Quigley,
NBN's chief executive on Monday. "Part of our purchasing strategy
is to make a substantial up front purchase commitment to encourage
suppliers to invest in their Australian supply chain ramp-up as we
head to volume rollout."
Corning will invest about A$25 million at its Melbourne facility
while Prysmian plans to spend and extra A$13 million on plant and
equipment in Sydney. The initial contracts will create 400 new
manufacturing jobs in Australia, Quigley said.
NBN Co. is negotiating many deals in relation to the network,
the main one being with Australia's largest telecommunications
company Telstra Corp. (TLS) to access its infrastructure. The
company has already awarded contracts to Nokia Siemens Networks
worth up to A$400 million over 10 years and an initial deal with
Alcatel-Lucent (ALU.FR) worth A$70 million.
Quigley said despite flooding around Australia, he doesn't
expect much impact on the rollout timetable for the project, which
was faced sharp criticisms from Australia's opposition parties who
question the enormous price-tag of the network.
The opposition has repeatedly called for a cost-benefit analysis
of the project, which the government has rejected.
Opposition communications and broadband spokesman Malcolm
Turbull says a cost benefit analyis "would look at the various
means of achieving the agreed end of universal and affordable
broadband and then identify those that were most cost effective and
efficient".
--By Gavin Lower, Dow Jones Newswires; 61-3-9292-2095;
gavin.lower@dowjones.com
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