15 December 2008

Clash of the 500lb gorillas pt 2

| harvyk1
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For all who didn’t read pt 1 of the thread see below

http://the-riotact.com/?p=10024

It appears that Telstra are potentially going to be making trouble now it’s been excluded from the tender process because surprise surprise, it’s tender response was not up-to scratch.

News have the story.

Why is this important to note in a place like Canberra? Well I expect a good percentage of people working in Canberra would have at some point in time worked on a project which went out to tender. It’s nice to know that the process in place has worked, and that a company can not come in and simply throw it’s weight around and expect to get something.

Maybe us small guys are still in with a chance in this town.

It’ll be interesting times ahead as Telstra no doubt now go to the courts.

Also does anyone know if TransACT has a preference of which other company they will be working with?

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Time Sol went home. He personnaly has made the biggest profit in the comms industry for himself. Procedure be damned, just keep the bonuses rolling.

“Gee, this is a surprise” (It’s difficult to write in a monotone voice)

http://www.australianit.news.com.au/story/0,27574,24807123-15306,00.html

So Telstra is readying the laywers.

Stage 1 – Put in cheap ass response (Check)
Stage 2 – Get lawyers involved (Check)
Stage 3 – Wrap up the NBN in courts until the gov’t gives in (In progress)
Stage 4 – Gov’t gives in – Profit for Telstra

Telstra assumes no other bidder has made a commitment as they have not made any public announcements on the subject. Continuous disclosure requirements for listed companies mean you have to disclose any information that may have a material effect on your share price, like investing $5 billion in network infrastructure. No other bidder has made such an announcement, ergo, no other bidder has the money available to commit and will have to seek financing of some sort.

That’s the story anyway. Could be just more management bulldust.

Personally I think that Sol’s strategy would have been brilliant in the US, but Australia works differently. Both sides have now backed themselves into a corner with their unrelenting brinksmanship, and in the end we’re the losers. Yes Telstra’s response was arrogant and stupid, but that said, cheering the triumph of ridiculous process over any chance of a decent outcome is the sort of stupidity only public servants can support.

Jim Jones said :

WTF is ‘enept’?

Sorry, my bad, I meant Inept.

la mente torbida1:06 pm 16 Dec 08

I know, nationalise telstra then flog it off to the successful tenderer

yebbut, s4anta, telstra claimed they were the only ones kicking in a substantial dollar figure themselves – irrespective of the gov’t co-funding, if this process is fair dinkum, how would telstra know what other bidders have promised to stump up?

i agree, telstra will be back in the game, at some point, but mebbe sans sol…

i still wanna know about ‘blane’ – intriguing as enept…

Jim Jones said :

WTF is ‘enept’?

bad spelling?

telstra can sit back and wait. they can afford to. If the winning consortia comes up to telstra later on for connection to the network, they will pay.

WTF is ‘enept’?

Listening to the radio, I believe Telstra is planning on making it very difficult for the successful bidder to gain access to the existing (and once publically owned) cables.

Sadly Telstra knew that because the previous enept gov’t sold Telstra inc infrastructure that they now can non-comply as much as they like, they own the infrastructure.

BTW It’s not only the previous gov’t I think are enept at IT stuff, hell I don’t think we have ever had a minister for IT who actually knew what they where doing.

I heard some of the Telstra hissy fit yesterday. Pathetic. If one has ever dealt with a government tender, rule 1 is that you read the request and include everything you have to include. If you don’t, you will almost certainly be excluded. It doesn’t matter if you’re really big, and really skilled, or even if you can do it at great price. If it’s mandatory that the bid be submitted on bright pink paper and that it discuss the effect on aircraft noise around public toilets, do it. Because doing the tender right shows that you’re careful – and people tend to prefer to pay serious money to those who take a careful approach – and that you respect your customer (even if it’s the government).

Telstra fell down somewhere here. If the shareholders want to get even, they shold get even with the board. If the board wants to get even, it should get even with the highly paid execs who decided a derisory expression of interest was good enough. If the government had allowed this budgie to fly with the eagles, it would have opened itself up to serious and credible challenges from everyone else involved.

tylersmayhem said :

Either way, I reckon Telstra will have their own high-speed broadband product up and running well before the 5 odd year project timeline draws to a close.

…and how many zeros behind the $ would you like with your happy meal?!

I’ll have my cheeseburger filter free please!

astrojax said :

Telstra claim that they are the only company to have submitted a proposal with a real financial commitment – of $5 billion.

i thought tender processes are confidential. how would they know??

as for the news story’s headline, what is a ‘blane’?

The tender documents states that the govt would kick in $4.7bn for the project.

This is all a sham. Telstra will probably be courted by the government at some point. Soon. I think this was just a ‘wrap on the knuckles’ effort by the government, knowing full-well that they will seek a better offer, or another form of ongoing support, from Telstra in the future. Trust.

johnny_the_knife8:30 am 16 Dec 08

I’ve said it before, but I firmly believe the reality is that the privatisation of Telstra without functional separation has done nothing but harm to telecommunications in this country. The installation of RIM devices in new developments is a good example, as is Telstra’s attempt a couple of years ago to sell wholesale ADSL services at a higher price than its own retail prices for the same services, not to mention the placing of artificial restrictions on bandwidth available on the ADSL1 service for many years. As a publicly listed entity, Telstra is obliged to do what it thinks is best for its shareholders, that’s not necessarily congruent with the best interests of the Australian telecommunications user.

I’m personally stunned this government seems to have grown a set of balls and stood up to Sol and his cronies on the Telstra board of directors. Having said that, it will be interesting to see what will happen when the successful bidder needs to access Telstra’s infrastructure to complete the network. I can’t see anybody being able to implement a NBN at a reasonable cost without accessing the existing infrastructure.

Further to the above, since Telstra’s share price dropped some 12% yesterday to a two year low on the back of this news, I wonder if the Shareholders will decide to hold the board to account sack Sol (the second worst thing to happen to telecommunications in the country)?

peterh said :

The NBN is all well and good, but how will it impact canberrans? not much. we have telstra, we have transact, we have soul, we have optus, etc, etc.

I think the many Gungahlites who are stuck with ADSL1 because Telstra installed RIMs all over their end of town instead of a decent spread of exchanges would be hoping for something better in years to come.

Telstra claim that they are the only company to have submitted a proposal with a real financial commitment – of $5 billion.

i thought tender processes are confidential. how would they know??

as for the news story’s headline, what is a ‘blane’?

tylersmayhem4:43 pm 15 Dec 08

Or hopefully soon to be lack there of! 🙂

tylersmayhem4:43 pm 15 Dec 08

Yep – monopoly indeed Poptop!

Ah! So Telstra is just playing spoilers, then? Won’t bid fair and square and will try to stop anyone else getting into the space.

I’m sure you’re right about who contacted the media.

poptop, the problem is that Telstra will now probably take the issue to court. They will no doubt put a holt to the NBN until the court has decided if the reasons Telstra was excluded where valid ones. Think GDE, except over all OZ.

Also I believe it was Telstra who contacted the media to say that their bid was rejected, not the gov’t.

tylersmayhem4:20 pm 15 Dec 08

Either way, I reckon Telstra will have their own high-speed broadband product up and running well before the 5 odd year project timeline draws to a close.

…and how many zeros behind the $ would you like with your happy meal?!

I think Telstra may try to grandstand on the basis of the sort of response the Australian community gave over the privatisation in the hope of getting popular support; but I think the people who are really concerned over broadband are different from the “mums and dads”.

Surely it is about the young turks who change ISPs like they change their underwear and know that there are players who can deliver as well or better than Telstra?

Either way, I reckon Telstra will have their own high-speed broadband product up and running well before the 5 odd year project timeline draws to a close.

Jonathon Reynolds4:07 pm 15 Dec 08

Under the normal tender process, if you do not meet the mandatory prerequisites, conditions or requirements it is normally deemed a non-compliant tender response and generally excluded from further consideration.

If the Government is strictly observing probity then they would not have made public the reasons for excluding any bidder at this early stage, only after completion of the process (usually after signing of actual contracts) is an opportunity given to the unsuccessful bidders for an debrief regarding their own bid. I do not know of any major tender process where the Government has ever specifically pointed out the deficiencies of individual bids in public fora.

At this stage we can only assume that Telstra is currently applying media “spin” to account for the fact that they knew that their 13 page submission was never going to demonstrate compliance and they are trying to ham it up for publicity and effect. It appears that the stock market can see through this facade and is currently given them a deserved dressing down for their ineptitude.

“Also does anyone know if TransACT has a preference of which other company they will be working with?”

To answer this bit, TransACT would have to listed under the subcontractor disclosure clauses that comporise as part of the tender docs, if any. I dare that they would be offering their investment thus far in network infratstructure they have rolled out and others have already referred to, and are bidding for the ACT slice of pie to bring it up to speed.

As for the whole Telstra, if they are silly enough not to comply with the most basic of mandatory compliance components of tender process, then they haven’t a leg to stand on. However, I would be surprised if this didn’t occur. The offer to provide further information when prompted, is technically viable but overall, if your bid doesnt have the info for the eval. committee to di it’s job, well you probably shouldn’t have wasted your time in the first place.

Harvyk, I agree tender processes are difficult and complex and I’ve only been involved in tiny, simple unimportant ones.

It does seem that Telstra is treating the process contemptuously, but equally the process appears to be responding correctly. I may have misread the concerns, but Telstra taking it’s bat and ball and going to court, doesn’t seem like something I need lose sleep over. Surely the Courts would simply check for appropriate legal behaviour and send Telstra home too?

tylersmayhem3:34 pm 15 Dec 08

Do we really want a company which couldn’t do the job correctly the first time around have another crack at it?

The same could be said about the Stanhope Government…but that’s another bedtime story ;P

It’s a bad thing because it shows Telstra having complete comtempt over the whole process. The tender process and governments accountability ensures that everyone from the largest players to the smallest all have equal chance to get a foot in the door, from small scale single person projects to multi-billion dollar projects. It also ensures that gov’t work does not simply get handed over to mates.

Writing a tender response is no small feat. I’ve personally been involved in preparing a tender and to see a company simply trying to use it’s weight to circumvent the process really annoys me. To put it in another term, how would you like it if you lost your job because you weren’t friends with the right people?

The NBN is all well and good, but how will it impact canberrans? not much. we have telstra, we have transact, we have soul, we have optus, etc, etc.

The NBN should be opened up to all carriers who have infrastructure in australia. Then let the consumer choose who they get the internet from.

not the government decide who we will get. Or the successful tenderer.

monopoly?

owned by the government?

sounds kinda familiar.

wait. who owns transact?

hmmmm.

I’m really not getting why I should be concerned about all this “potential” for Telstra to go postal.

The last thread was – Testra didn’t submit a proper bid and will potentially behave badly if not selected. This was somehow was converted into an assumption that the Tender Panel and the Government would cave in.

That didn’t happen – Telstra appears to have been, properly, excluded from the tender process.

So why is this next phase so risky and what, potentially, will Telstra do? Go to court?

Why is that a bad thing?

Dante, I should have read you post a little more carefully. I realised I just re-interated everything you said. – My Bad

I’m kinda hoping we leave Telstra’s monopolised network with the NBN. This may actually be a cleaver way for the government to re-gain control of our infrastructure which was sold off under the Telstra, T2 and T3 floats.

I’m not sure if I want TransACT to build the Canberra section of the NBN. They kinda tried and failed. Whilst the original TransACT system was an excellent idea, which could have easily been expanded, as far as I know they ran out of money and thus TransACT ADSL was born. Basically TransACT went in a re-sold Telstra’s ADSL as it’s own. Do we really want a company which couldn’t do the job correctly the first time around have another crack at it?

tylersmayhem3:08 pm 15 Dec 08

“And Telstra is the only company with the existing network, technical know-how, world-leading vendor, skilled workforce, established wholesale systems and proven track record of building world-class networks.”

Oh, you mean MONOPOLY?! Of course Tel$tra is the only company with the said credentials! I think it’s about time that Tel$tra miss out which allows for some healthy competition. I am certain that there are at least a couple of other companies who could successfully deliver this – but it is dependent on how much Tel$tra drags their feet and allows access to their monopolised network.

Do Canberrans really want TransACT to build their component of the NBN given their lackluster performance with their first attempt at rolling out a city-wide network?

Considering they reduced their scope mid deployment and started using wholesale Telstra ADSL services to ‘complete’ their coverage, I’d suggest it wouldn’t be the smartest move.

..given the current financial climate, maybe a smart move would be to put this election promise on the backburner?

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