24 June, 2011

The government cleared a major hurdle towards creating a high-speed national internet network with a multibillion dollar deal with Australia’s biggest telecommuni- cations company to use its existing cable network.

Telstra Corp said it had signed a deal worth 11 billion Australian dollars (USD 11.59 billion) with the government owned NBN Co to use Telstra’s existing underground cable network and infrastructure for the next 35 to 40 years.

Telstra agreed to spend 2 billion Australian dollars upgrading its infrastructure as part of the deal. The company still needs the approval of its shareholders at a meeting on October 18.

Prime Minister Julia Gillard told reporters the deal would accelerate the rollout of the national broadband network and avoid unnecessary duplication.

The aim of the 36 billion Australian dollar project is to connect 93 per cent of the population to high speed broadband by 2018. The majority of the network would consist of fibre-optic cables with remote areas connected by wireless and satellite services. The rollout of cables has already begun in Tasmania and some regional centres of the mainland.