French networking hardware supplier Alcatel-Lucent has won a significant contract to supply the National Broadband Network Company with up to $1.5 billion of optical and ethernet aggregation equipment.
The deal, according to a statement issued by NBN Co this afternoon, means Alcatel-Lucent will be the “initial strategic supplier” of Gigabit Passive Optical Network (GPON) and Ethernet Aggregation equipment needed to operate the NBN.
NBN Co has committed to an initial $70 million fixed price purchase for the equipment, according to the company’s head of Corporate Services Kevin Brown, with the plan being to buy up to $1.5 billion of hardware during the NBN construction period.
Other GPON equipment suppliers will also be engaged once NBN Co achieves “full rollout scale”, according to the executive. “The contract with Alcatel-Lucent allows NBN Co to purchase what it needs when it needs it, and allows NBN Co to engage other suppliers at a later date of our choosing,” he said.
A further $15 million contract with the French networking giant will see the company provider services over the next 12 months to assist NBN Co with engineering and testing activities in the initial rollout phase of the NBN.
Both NBN Co chief executive Mike Quigley and chief financial officer Jean-Pascal Beaufret have long histories with Alcatel-Lucent — Beaufret served as the company’s CFO from 1999 through 2007, and Quigley himself has a 36-year history with the company.
However, NBN Co has moved quickly to attempt to squash any impression that that history could have influenced the billion-dollar win announced today.
Brown’s statement noted that neither one of the pair participated in the decision by the NBN Co’s executive committee to select Alcatel-Lucent for the deal. Neither, Brown claimed, where the pair involved in any price negotiations, and they also didn’t participate in the board approval to select Alcatel-Lucent for any of the contracts.
“This significant contract is consistent with the detailed NBN Co procurement approach and the board-approved selection process,” NBN Co’s statement said.
Image credits: NBN Co