OPTUS SEEKS GOVERNMENT FUNDING TO FURTHER EXTEND NETWORK COVERAGE

Optus today announced that it has lodged a proposal with the Australian Government, under which it would further extend the coverage of its 3G mobile network to reach 98 percent of the population.

The proposal means that Optus would increase competition even further, as it comes on top of last week's announcement that Optus will spend up to $800 million to extend its 3G network to cover 96 percent of the population.

Under last week's announcement, Optus has committed to build between 2000 and 2500 base stations and deliver coverage to 650,000 square kilometres of the Australian landmass - covering 96 percent of the population.

If the Government accepts the 'Optus Broadband Plus' proposal, Optus would extend its network to cover another 500,000 square kilometres using approximately 750 base stations.

Because remote Australia is so lightly populated, you need to cover half a million square kilometres to reach a further two percent of the population.

The extension would cost an estimated $370 million, with $200 million of the cost to be funded by the Government's Broadband Connect program and $170 million to be funded by Optus.

Under Optus Broadband Plus, Optus would use the additional network facilities to deliver fixed equivalent broadband services in the 500,000 square kilometre extension area. Regular 3G mobile services would also be offered.

"If the Government supports our funding application to further extend our 3G mobile network under Optus Broadband Plus, Australia can lock in a competitive market structure over a much larger footprint than has ever been achieved before," Mr Paul Fletcher, Optus Director of Corporate and Regulatory Affairs said.

"Our proposed network extension will be purpose built for regional Australians, in places where they tell us they need it most."

The incumbent has received over $350 million dollars of public money to expand its network in rural and regional Australia in the last ten years, of which $120 million has been used for its mobile network.¹

"To date, most Government funding has reinforced the incumbent's rural monopoly. The Government can now square the ledger by funding the expansion of a competitive network into areas where it would not be commercially viable to build," Mr Fletcher said.

"By doing so the Government can entrench network based competition for virtually all Australians for the foreseeable future."

The extended network covering a further two percent of the population would operate at the 900 MHz spectrum - pending successful evaluation of the spectrum. It will be overlaid with High Speed Downlink Packet Access (HSDPA), offering progressively increasing speeds starting at 3.6 megabits per second initially and rising to 14.4 megabits per second.

Locations set to benefit from the network extension include:

NSW: Culculandah, Mallanganee, Wallandbeen

QLD: Blackall, Goodnight Scrub

VIC: Whaparilla, Cape Bridgewater

SA: Andamooka, Wattle Range

TAS: King Island, Triabunna

WA: Molloy Island, Gidgegannup

NT: Dundee Downs, Temple Bar

Note to Editors:

• Optus lodged its Connect Australia funding submissions on 18 December 2006.
• In addition to Optus Broadband Plus, Optus' submission included a joint application by Optus and Elders for funding to build a fixed broadband access network serving rural Australia, owned by an Optus-Elders joint venture company.

¹ Source, Telstra, 'Refuting Monopoly Claims', presentation issued July 2006

Media contact:
Melissa Favero
Optus Corporate Affairs
Tel: (02) 9342 5030