Tas 21 Pty Limited
Industry Development Plan
26th September 2001
Cover Page
Tas 21 Pty Limited
ACN 093 098 545
Industry Development Plan
for the period from
1 October 2001 to 30 September 2002
Contacts
Up to Ministerial approval of Plan:
Mr Jim Holmes
Principal Consultant
Ovum Pty Ltd
6th Floor
388 Lonsdale Street
Melbourne VIC 3000
Tel: 03 – 9606 0499
Fax: 03 – 9606 0799
e-mail:
After Ministerial approval of Plan:
Mr Christopher Denny
Managing Director
Downer Construction Group Pty Limited
And Director of Tas 21 Pty Limited
Level 7, 76 Berry Street
North Sydney NSW 2060
Tel: 02-9966 2400
Fax: 02-9955 9649
e-mail:
1. Period of the Plan 4
2. Statement of ownership 5
3. Strategic statement 6
4. Industry development 8
5. Reporting and consultation 10
1. Period of the Plan
This Plan is for Tas 21 Pty Limited, which is referred in the remainder of this Plan as ‘Tas 21’. This Plan covers the period from 1 October 2001 to 30 September 2002. This period covers the substantial part of the construction phase of Tas 21’s backbone network (which is referred to as ‘the Backbone’ in this plan) in the northern, eastern, central and southern areas of Tasmania.
2. Statement of ownership
2.1 Tas 21
Tas 21 is a company that has been established as the corporate vehicle for undertaking the provision of a backbone telecommunications network as outlined in this Plan. The company is owned 100% by Downer Connect Pty Ltd, one of the companies that form the Downer Group.
The ownership structure is as described in the following figure:
2.2 Downer Connect Pty Ltd (ACN 057 593 503)
Downer Connect is the telecommunications arm of the Downer Group of companies, and is responsible for the design, construction and operation of all telecommunications projects undertaken by the Group. As such, Downer Connect is the 100% owner of Tas 21
2.3 Downer Engineering Group Pty Limited (ACN 006 016 495)
Downer Engineering is part of the Downer EDI Group that is headquartered in Australia and operates across the Asia Pacific region in Australia, New Zealand, the Pacific Islands, Papua New Guinea, Singapore, Malaysia, and Hong Kong.
Downer Engineering provides all encompassing construction and telecommunications infrastructure services in its key markets.
In the telecommunications sector, Downer Engineering, through its 100% subsidiary, Downer Connect, provides design, construction and maintenance services and systems associated with radio/wireless, mobile, microwave, optical fibre, broad band and copper infrastructure, digital network, network cabling, cable systems, satellite, audio and video systems technologies for both business and residential applications.
Principal clients are sourced from the public and private sector, including private developers, government departments and state authorities in charge of transport, communication, power and associated infrastructure.
3. Strategic statement
3.1 Tas 21’s general strategy
Tas 21 will build, operate and maintain the Backbone, a fibre optic cable network which will, when completed, connect northern, eastern, central and southern regions of Tasmania. The Backbone will connect all major population centres in this total area, including Hobart, Launceston, Burnie and Devonport. The network is referred to as the Backbone in this Plan.
Construction of the Backbone is planned to commence in November 2001 and is planned to be completed by approximately the end of July 2002.
It is anticipated that a telecommunications retail network will extend from the Backbone and will be constructed over a period extending beyond the horizon of this Plan. It is proposed that this broadband retail access network shall pass 109,000 households and the majority of businesses in the region.
The broadband retail access network to which the Backbone will connect will be constructed over a further period (after the period of this Plan) of four years to the end of 2006. The role of the Downer Group and Tas 21 in the construction and operation of the access network is not clear at this stage.
Tas 21 will own and operate the Backbone. It will be a provider of managed wholesale bandwidth services to the retail telecommunications market in the area it serves.
3.2 History
Tas 21 will be a new telecommunications carrier. It is seeking to meet the market demand for wholesale backbone services in Tasmania, including the demand from alternative retail carriers and service providers.
3.3 Linkages with related companies
Tas 21 will have a key relationship with Downer Connect Pty Limited (‘Downer Connect’).
Downer Connect will have a design and construction contract for the Backbone with Tas 21. Under this contract, Downer Connect will be responsible for the entire design and construction of the Backbone , and for the commissioning and testing of the Backbone as it is progressively completed.
3.4 Products and services
Tas 21’s business will be the provision of transmission capacity within the Backbone on a wholesale managed service basis to retail telecommunications customers in those parts of Tasmania served.
The services that will be offered initially are:
· Managed wholesale bandwidth capacity services
· Supervisory Control and Data Acquisition (SCADA) services for use in relation to gas pipeline management.
At a later stage, outside the period of this Plan, Tas 21 may become involved in the provision of retail services, either as a carrier or as a service provider. In preparation for having the widest set of commercial options in the retail market Tas 21 is developing a suite of retail products for the provision of specialised retail broadband carriage and content services, including online education and distance learning services. The R&D program, described later in this Plan, is targeted at such future opportunities.
3.5 Target markets
Tas 21 is initially targeting the market for wholesale bandwidth in Tasmania, consistent with its business strategy.
Targeted customer segments will include:
· Licensed carriers, particular regional carriers and major carriers seeking diversity and redundancy of network infrastructure, and potential access network carriers
· Service providers, including cariage and content service providers
· Broadcasters seeking backbone transmission capacity
· Internet Service Providers (ISPs).
3.6 Possible future plans
As noted above, Tas 21 is intent on creating a viable and sustainable commercial telecommunications business within the area it is targeting. Future plans beyond provision of wholesale bandwidth services have not been formulated at this stage. Tas 21 may participate in the retail telecommunications market in future, and with that in mind, is planning a suite of carriage and content services, including distance learning services, to provide commercial options for the future.
3.7 Estimated revenue
The plan covers the period of initial construction of the Backbone. Tas 21 does not anticipate commencing commercial operations within the period of the plan, and does not anticipate receiving any revenue during that period.
4. Industry development
4.1 Strategic commercial relationships
Tas 21 will commence construction of the Backbone in November 2001.
As noted in Section 4 of this Plan, Downer Connect will have a strategic relationship with Tas 21. This relationship will be founded on a commercial contract under which Downer Connect will design and construct the Backbone for Tas 21.
4.2 Research and development
Tas 21 has no facilities of its own to undertake research and development activities directly. Tas 21 has entered into detailed discussions with three technology vendors with research and development capabilities and facilities in Australia with a view to selecting one of them to undertake the research and development program described below. The technology vendors involved are Cisco, Nortel and Lucent.
Tas 21 will enter into a contract with the selected technology vendor for the provision of research and development (R&D) services, covering the following detail.
R&D service provider’s obligations
The chosen R&D service provider will undertake R&D to develop an e-learning solution for deployment over a ‘To The Home’ network for the Tasmanian residential market.
The intent of the R&D will be to utilise the latest technological advancements in developing a cost effective broadband solution suitable for the delivery of a variety of educational content to Tasmanian constituents.
The R&D will include the following activities:
· design, prototyping, and product development of the network elements required for the solution; and
· development of content suitable to trial the application.
The chosen R&D service provider will perform this R&D over a 12 month period using resources based in Australia.
Benefits of R&D Program
It is envisaged that the following benefits will be derived from the R&D activity:
· increase in skill level of the Australian resources involved in the R&D;
· improvement in the accessibility of education within the Tasmanian community;
· improvement in the delivery of education to individuals whose mobility is restricted due to a disability or illness; and
· commercial benefit through the commercialisation of the solution, for distribution both in Australia and globally.
Intellectual Property associated with R&D
Tas 21 will contract with the chosen R&D service provider for assistance in the commercialisation of the R&D in Australia and overseas. The intellectual property rights in the solution will remain with Tas 21.
Program Cost
Tas 21 will spend no less than $100,000 on the R&D program described above in the period of this Plan.
R&D Program contractual arrangements
Key aspects of the R&D contractual arrangements are:
· Within one calendar month of being granted a Carrier Licence Tas 21 will enter into a formal agreement for the provision of R&D services as described above with its chosen R&D service provider for the purpose, and the terms of that agreement will reflect the details set out above.
· Within a further 15 days Tas 21 will place a firm order for R&D services with the R&D service provider.
· The order shall be for services valued at no less than $100,000.
· The ownership of the intellectual property associated with the R&D will remain with Tas 21.
· The R&D service provider shall report formally to Tas 21 at three months intervals from the placement of the order, and on the anniversary of this Plan, on progress in the development of the R&D program subject to the agreement.
Further report to the Minister
Tas 21 undertakes to provide a further report to the Minister on orbefore 28 December 2001 providing additional information in realation to the vendor company chosen by Tas 21 to be its R&D provider, and the details of the R&D arrangements entered into.
4.3 Export development
Tas 21 has no plans of its own at this stage to operate in overseas markets or to export services to overseas markets. Its expenditures through its contractors and strategic partners, in particular Downer Connect, adds to their capability to better support their own export activities.
4.4 Employment and training
Employment
Tas 21 will have a maximum of 5 directly employed staff during the period of this plan.
These staff will be employed on the following:
· General management and administration … Brian Eslick
· Engineering and construction oversight ….. Superintendent (TBA)
In addition, Downer Connect will employ between an estimated 25 and an estimated 50 personnel during the period of the Plan to design, construct and commission the Backbone for Tas 21. The average additional employment during that period is estimated to be 40 personnel.
Training
The small staff group that Tas 21 intends to employ directly will already be trained to undertake the functions for which they are employed. Consequently no vocational training is envisaged in the period of this plan.
Staff employed by Downer Connect will be subject to Downer Connect’s own training arrangements, and no training is currently contemplated specifically in relation to the Tas 21 contract.
4.5 Disabilities
Tas 21 will not be providing (within the period of this plan) retail services to the general public. Tas 21 will initially be a provider of wholesale bandwidth services to carriers and service providers. By their nature Tas 21’s services are not relevant, directly, to the communications needs of the disabled.
5. Reporting and consultation
Tas 21 is aware of its responsibilities to the Commonwealth Government and the Australian people, which are set out in Part 2 of Schedule 1 to the Telecommunications Act 1997, and will:
· Make a summary of this Industry Development Plan available to the public within 90 days of approval of this Industry Development Plan by the Minister;
· Provide the Minister with written notice of any matters that may affect the achievement of any of the statements and objectives in this Industry Development Plan as soon as practicable after Tas 21 becomes aware of such matters. The written notice will set out the particulars of the matter and explain the effect of the matter on the achievement of the Industry Development Plan;
· Provide the Minister with the Annual Report within 90 days of the end of each Commonwealth Financial Year (30th June);
· Make a public summary of the Annual Report available within 90 days of the end of each Commonwealth Financial Year (30th June);
· Seek the Minister’s approval to vary the Industry Development Plan; and
· Not vary this Industry Development Plan without obtaining the Minister’s approval of any variation, which approval will be sought by Tas 21 submitting a copy of the proposed variation to the Minister. Within 90 days of approval of the variation by the Minister Tas 21 will make a summary of the variation available to the public.
Industry Development Plan 10