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Australia strikes broadband deal with Telstra and Optus | |
(about 1 hour later) | |
Australia's two biggest telecoms companies have joined the government's A$36bn (£24bn) plan to roll-out high-speed internet across the country. | |
Telstra and Optus will close down their infrastructure and transfer customers to the state-owned National Broadband Network Company (NBNC). | |
About 60% of households have broadband, but speeds are slow compared with many industrialised countries. | |
The plan is to connect more than 90% of households to a super-fast network. | |
The two telecoms companies already have extensive broadband operations, but the government said it would be more economical to bring all the parties together. | |
Telstra estimates it could make about A$11bn over several decades from the new deal as it will earn revenues through disconnection payments as well a share of profits from the new network. | |
Optus, owned by Singapore Telecommunications, will make about A$800m. | |
"Two major telcos have now signed on with the NBNC and that will mean a very strong take up," said Australia's Treasurer Wayne Swan told reporters. | |
"This will, of course, completely change the market structure in Australia," he said. | |
Broadband speeds in Australia are below the OECD average at 32.4 megabits per second. | |
The slow speeds are blamed on the huge distances and rough terrain that makes connecting the towns and cities across the vast Outback an expensive investment. | |
Opposition | |
The aim is to deliver broadband speeds of 100 megabits per second to homes, schools and businesses. | |
Only a few countries, including South Korea, Japan, and Germany, currently achieve such speeds. | |
Prime Minister Julia Gillard has made wiring-up the country with fibre optic cables a key policy platform. | |
But opposition parties have called the project a costly folly and promised to review the plans should they every get into government. | |
The deal still needs approval from a vote by Telstra shareholders on 18 October and clearance from the competition watchdog. |