Another blow for Wimax in Australia, says analyst

10 Apr 2008

The Australian government has cancelled a $869 million broadband project that, according to one analyst, is a big blow to Wimax in the country.

Instead, the government has opened the bidding for an FTTN-based network, after terminating funding for the OPEL network previously awarded to a joint venture between Optus and Elders.

In a statement, Futuris Corp. (which owns Elders) and Singapore Telecommunications (Optus' parent firm) said the new government has cancelled because the project did not satisfy coverage requirements and that the project would duplicate the government-proposed FTTN network.

The decision to cancel the funding is "very significant but not too surprising", according Ovum analyst Nathan Burley.

According to him, Stephen Conroy, Australia's minister for broadband, communications and digital economy, was not in favor the project since the previous government, questioning Wimax as a platform.

Instead, Conroy, according to Ovum, advocated an FTTx network to cover 98 percent of Australia households, which includes $4.3 billion in government funding and much duplication of the planned OPEL network.

Optus will again participate in the bidding against incumbent operator Telstra.

"Although Conroy continually stated that the OPEL contract would be honored, we maintained that if there were a way out he would be likely to take it," said Burley.

Although the loss of the competitive backhaul capacity may be the largest blow, he noted that the termination will have the biggest ramifications on the Wimax industry.

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