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 across Australia.

Australian government-owned NBN Co. has awarded three equipment contracts for network infrastructure over the next five years with the largest--worth 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. (AAPL) and Samsung Electronics Co. Ltd. (005930.SE), 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 an extra A$13 million on plant and equipment in Sydney. The initial contracts will create 400 new manufacturing jobs in Australia. "Corning is fully committed to the NBN rollout," said Rainer Dittrich, managing director of Corning Cable Systems in Australia.

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 analysis "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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