The Downer EDI Limited (ASX: DOW) share price is up after announcing it had been awarded two contracts by the NBN Co.
Downer’s NBN contract wins
There are two contracts – the N2P Evolution contract and the NBN Fixed Wireless Services contract.
Downer is a leading provider of fixed and wireless network services in Australia and New Zealand and one of the largest delivery partners for construction of the NBN network.
N2P Evolution
The N2P Evolution contract commences in July 2021, with the initial term through to December 2023 and an extension option of two years. The contract is valued at an estimated $160 million to Downer over the initial two-and-a-half-year-term.
Under the contract, Downer will provide design and construction services across New South Wales and Western Australia to support NBN’s plans to extend fibre deeper into communities.
NBN plans to make its wholesale speed tiers available, as demand arises, to around 8 million premises, or up to 75% of homes and businesses on the fixed line network by 2023.
Fixed Wireless Services
The Fixed Wireless Services contract begins in July 2021 with an initial term of two years and two extension options of two years. The estimated value of the initial term is $60 million and the total estimated value including both extension options, is up to $120 million.
Under this contract, Downer will deliver end-to-end design and construction services across NBN’s national fixed wireless network. Services will include network planning, site acquisition and design (SAED), construction, and integration activities to facilitate network capacity extension, coverage expansion and transmission augmentations that will enable upgrade and enhancement of the work.
Management comments
Downer CEO Grant Fenn said: “With the major network build programs now complete, Downer is pleased to assist in the evolution of the NBN network. These two contracts consolidate Downer’s position as a key long-term NBN approved delivery partner, and we look forward to continuing our partnership and optimising the NBN network.”
The Downer share price is currently up more than 0.5%.
