Alcatel-Lucent has been granted a profitable contract to provide critical fibre optic equipment for the $43 billion national broadband network.

The former employer of NBN Co chief Mike Quigley, is the first strategic supplier chosen for the Gigabit Passive Optical Network (GPON), Ethernet Aggregation equipment will operate the NBN.

Reports, however, said that Mr Quigley did not participate in the selection process to prevent the issue of a conflict of interest. His Alcatel-Lucent colleague and now NBN Co finance chief, Jean-Pascal Beaufret played no part in the choosing as well.

NBN Co head of corporate services Kevin Brown said it had entrusted an initial $70 million to the equipment purchase. According to him, NBN Co has up to $1.5 billion funds to procure such hardware.

"Entering into this key contract enables NBN Co to deliver a world-class, fibre-based, high-speed network for Australia, starting with our announced first release sites," Mr Brown said.

"We plan to spend up to $1.5bn on this highly-specialised network equipment during the lifetime of this project."

The transaction is not exclusive to Alcatel-Lucent, with other GPON equipment providers still in the selection process.

"The contract with Alcatel-Lucent allows NBN Co to purchase what it needs when it needs it, and allows us to engage other suppliers at a later date of our choosing," said Mr Brown.
Alcatel-Lucent is also bound to provide services to assist with engineering and testing activities for the network as part of another contract, worth $15m, with NBN Co.

The broadband vision, proposed by Prime Minister Kevin Rudd, who was yesterday replaced by Julia Gillard, aims to link 90 per cent of households and businesses to a 100 Megabits per second network.

Opposition leader Tony Abbott, however, plans to break up the NBN if elected, although current deals would be honoured.