Australia's government has cancelled a A$958 million (US$871 million) funding agreement to build a new broadband network in rural areas, joint venture partners Singapore Telecommunications and Futuris said.
The groups said in separate statements the government had terminated the deal because certain conditions had not been met, including prescribed coverage requirements, but added they believed all conditions had been satisfied.
OPEL, a joint venture between SingTel unit Optus and Futuris's Elders business, finalized the agreement last September with the previous government.
The new Labor administration, which was elected last November, said the OPEL plan also risked duplicating its own election pledge to build a new broadband network, Futuris said.
Australia's existing broadband network is slow compared with other developed nations, although uptake rates are on a par with other countries.
SingTel said, in the absence of government compensation, Optus's capital expenditure of A$9 million would be written off in the quarter ended March 31, while Futuris said it expected to take a provision of around A$15 million in this financial year.