Quigley addresses questions over Alcatel-Lucent deal

Had no hand in NBN Co's deal with awarding the contract despite past history with the company, Quigley says

NBN Co CEO, Mike Quigley, has defended the company’s decision to sign a multi-million dollar deal with Alcatel-Lucent, despite both Quigley and CFO, Jean-Pascal Beaufret, being former employees of the company.

Speaking on ABC television over the weekend, Quigley claimed that both he and Beaufret were not involved in the decision to award the telecommunications gear supply contract to Alcatel-Lucent.

“What I did is before we started talking to vendors, we laid out the types of functionality that we needed and then I stepped back from it,” he said. “Now, it was essential that I stepped back from it, recused myself from it, simply because I had been in the vendor community previously and I had an association with one of the biggest players in fixed line infrastructure in the world so that made good sense.

“I also was not party to the briefing that the management team gave the board of NBN co. In getting final sign off and approval, I wasn't party to that either.”

The deal with Alcatel-Lucent, announced last week, saw the company appointed as the initial strategic supplier for the gigabit passive optical network (GPON) and Ethernet aggregation equipment needed for the National Broadband Network (NBN).

In a press release from NBN Co about the deal, the NBN wholesaler highlighted distance placed between the former Alcatel employees and the telecommunications provider.

"Mr Brown said that to avoid any perception of conflicts of interest from previous employment both the CEO, Mr Mike Quigley, and the Chief Financial Officer, Mr Jean-Pascal Beaufret, did not participate in the decision by the Executive Committee to select Alcatel-Lucent, or negotiate any price arrangement within this agreement, nor did they participate in the Board approval to select Alcatel-Lucent for any of these contracts," the release reads.

The deal, worth $85 million in equipment and services over the next 12 months, will see Alcatel assist NBN Co with engineering and testing activities in the initial deployment of technology for the NBN.

NBN Co head of corporate services, Kevin Brown, said at the time that the company planned to spend up to $1.5 billion on highly-specialised network equipment during the lifetime of the NBN project.

Commenting on the recent Heads of Agreement signed with Telstra, Quigley said that having Telstra as NBN Co’s biggest customer would not result in any special favour given to the telco.

“The relationship with Telstra will be a commercial relationship, it's true it will be one of a large degree of interaction because hopefully we will be selling them services and by services I mean we will carry their traffic on our network and in turn we will be continuing to buy access to ducts, pit, pipes, exchange space, backhaul from them,” he said.

“So there will be a very close interaction… but in the deal that we signed with Telstra, we made sure we had what I called equivalents, in other words there was nothing that we signed up to that gave any special treatment to Telstra.”

Quigley also confirmed plans to begin construction on the NBN mainland trial sites next month, with the first services due to go live in the second half of 2011.

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