Telstra said it had been excluded from the bidding process because its proposal submitted on November 26 did not include a plan on how to involve small and medium-sized enterprises in the building of the high-speed broadband network.

A spokesman for the Communications Minister Stephen Conroy confirmed Telstra had been excluded from the process and would not be allowed to resubmit its bid.

“The expert panel has determined that Telstra’s submission to the national broadband network is not compliant. They are out of the process now,” said the spokesman.

Telstra chairman Donald McGauchie said the reason for its exclusion was “trivial”.

“Telstra is the only company to have submitted a proposal with a real financial commitment - of $5 billion,” Mr McGauchie said.

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

“The Commonwealth could hardly have dreamed up a more trivial reason to exclude Telstra from the NBN. This is a process that seemingly excludes bidders on such trivial and legally questionable technicalities, but doesn’t take any action on material issues such as financing and having the technical capability to build the network.”

Telstra said it had fully complied with the “request for proposals” requirements, which, it said, had required a plan for small and medium-sized enterprises to be lodged as part of the proposal.

“Telstra provided its SME plan to the Government in early December and, in Telstra’s view, in accordance with the RFP (request for proposals),” Mr McGauchie said.

Bidders for the $10 billion-plus broadband network were to begin presenting their bids in front of the Government`s eight-person expert panel at the weekend.

The panel, chaired by Communications Department secretary Patricia Scott, was to take initial presentations from the bidders in Canberra on Sunday and today.

The panel has eight weeks from the close of tenders on November 26 to make recommendations on who should be handed the job of building the network, into which taxpayers will invest $4.7 billion.

The other bidders include Singtel Optus, Melbourne-based Acacia, Canadian group Axia, the Tasmanian Government and Canberra utility group TransAct.

Telstra submitted a thirteen-page letter offering a detailed bid if the Government committed to a list of demands, including an undertaking not to split the company. Telstra has said it wants the $4.7 billion as a loan and its network could cover as little as 80 per cent of the country.

Australia now faced significant risks by excluding Telstra, the company said.

“If future generations bear the costs of a substandard NBN, today`s decision will be seen as a turning-point in the nation’s history,” a Telstra statement said.

“This is the largest, most complex NBN build anywhere in the world.

“Australia now risks being the only country ever to build an NBN without the existing fixed network owner in the most difficult financial climate in decades.”

Telstra chief executive Sol Trujillo said the Government could still choose Telstra.

“It is too early to rule anything in or out, and we remain hopeful that sense will prevail outside the RFP process at a later date,” Mr Trujillo said.

“But if not, let me be clear, we have plenty of options and will continue to act in the interest of shareholders, customers and employees.”

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