NBN Co selects Silcar for around 40% of fibre rollout over next two years

2 Jun 2011

Australian public-private company NBN Co, which is responsible for overseeing the construction and management of the in-deployment National Broadband Network (NBN), has inked a deal which it says will enable it to ‘prepare for the first large-scale deployment of optic fibre’ for the nationwide infrastructure. The company has announced that it has reached an agreement related to terms and prices for construction of part of the network with Silcar, a 50/50 joint venture between Germany-based electrical engineering and electronics giant Siemens and Thiess Services, a 100% owned subsidiary of Thiess Pty Ltd, Australia’s largest mining construction and services company. Over an initial two-year period the deal, which is worth AUD380 million (USD406 million) with an option to add a further two years to the agreement at an additional value of AUD740 million, will see Silcar roll out the fibre network in Queensland, New South Wales and the Australian Capital Territory (ACT). NBN Co claims that the deal represents around 40% of the construction work that it expects to take place over the next two years, with nine of the 19 NBN Second Release Sites previously announced by NBN Co covered under the agreement, with those being: 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. The final detailed contract between the two parties is expected to be signed by 17 June 2011.

Commenting on the deal, NBN Co’s head of Corporate Services, Kevin Brown noted: ‘We selected Silcar based on objective criteria, and on its performance in the field as the construction company responsible for the rollout in the Armidale First Release Site … In our one-on-one negotiations we agreed NBN Co would assume the risk of other infrastructure providers and Silcar would assume the risk of construction. Through the negotiations NBN Co and Silcar have established the optimal balance between price reductions, certainty of volume, location of premises, appropriate payment terms and the benefits of initial exclusivity to defray overheads.’

The development comes hot on the heels of news previously reported by CommsUpdate, with it confirmed yesterday that NBN Co had selected Swedish vendor Ericsson to assist in the deployment of a Long Term Evolution-based (LTE-based) fixed-wireless network for rural and remote regions. The contract signed between the two companies has been valued at AUD1.1 billion over a ten-year period. In light of the pair of announcements Mr Brown added: ‘Today’s agreement with Silcar, coupled with the signing of Ericsson to deliver a fixed-wireless service, combined with the earlier announcements of our interim satellite service and the IT contract for our operating and business support systems, means most of the major building blocks are now in place to deliver a high speed national broadband network across the country.’

Australia, NBN Co, Siemens AG