Australia dumps rural broadband scheme

The Australian government has cancelled its US$871 million (€560 million euros) regional broadband contract with Singtel-backed Opel. Opel's partners, SingTel and Futuris, both told the Australian Stock Exchange today that the deal to fund broadband networks outside urban areas had been terminated.

'On 1 April 2008 the Government advised that it considers the conditions have not been satisfied and has terminated the funding agreement,' the SingTel statement said. SingTel however claims that both partners 'maintain that all conditions precedent to the funding agreement have been satisfied' and said it is considering litigation.

The agreement was made with the previous Australian government in July last year. SingTel Optus and Futuris' subsidiary Elders agreed to build a broadband access network to 890,000 households in rural and regional Australia within two years.

The decision amounts to a clearing of the decks by the new communications minister, Senator Stephen Conroy, as he embarks on a fresh national broadband network scheme intended to deliver 12Mbps to 98% of Australian households.