NBN contract work sent 'offshore'
Swedish engineering multinational and major NBN contractor Ericsson sent work on the broadband project offshore to China for about one month last year and is now sending work to India, Fairfax Media can reveal.
The move follows intense scrutiny of Chinese company Huawei, which was banned from building or supplying equipment to the national network because of security concerns.
The Ericsson work being sent offshore to India concerns integration work on the fixed-wireless part of the network while the work sent to China concerned radiofrequency design.
According to a well-placed Ericsson source and confidential documents obtained by Fairfax Media, the work was previously being done in Australia.
NBN Co said it was aware of the offshoring.
"In both instances, NBN Co approved of Ericsson's actions so as to hasten the delivery of better broadband to Australians who live in the bush," NBN Co said in a statement.
In the Ericsson document, the Swedish multinational forecast that 29 workers in India would be working on the NBN by December, saving it about $5 million.
It is understood some of these cost savings are expected to be passed on to NBN Co.
Ericsson said last week that it continually reviewed its workforce "to ensure alignment with project and customer needs", but would not comment on offshoring or whether it was considering 10 proposed local redundancies — a move that now appears to have been reversed.
"Details of our customer projects are treated as commercial in confidence," it said, adding that it relied on its global workforce "to deliver professional and high quality services".
NBN Co would not confirm where the work sent offshore last year was completed, instead saying it was sent "overseas".
"... For one month in 2012, during a particularly busy period, Ericsson sought assistance from its overseas offices to help with the radiofrequency design function," the NBN Co statement said.
"The resources required for this activity were not able to be sourced in Australia in the time frame required.
"When it was completed, overseas involvement in this work ceased. This function is now being performed by Ericsson in Australia," it said.
It is understood about four workers were involved with the work in China.
NBN Co said the work being sent "abroad" at the moment — which a source, and confidential Ericsson documents, indicate is being done out of India — involved six employees. But like the Chinese work, NBN Co refused to state where the work was being conducted from.
"A total of six workers from Ericsson offices abroad, who possess specialist engineering expertise, are [currently] complementing the work of those here in Australia," NBN Co said.
The Ericsson source said the Swedish firm was attempting to step up offshoring, recently bringing more than 15 Indian workers to Australia to learn about design on the NBN's fixed-wireless network.
NBN Co did not dispute Ericsson was doing this, but said it hadn't received a proposal for it. Ericsson did not address the 15 figure in its response.
"We've received no proposal from Ericsson for this [design] work to be performed outside Australia," NBN Co said.
The parliamentary secretary for broadband, Ed Husic, said Ericsson sending NBN work offshore was a "matter for NBN Co".
Where possible, Mr Husic said, NBN Co sought "local content and sourcing arrangements in all its major contracts, particularly where there is known local supply capacity or the potential to promote additional local production".
"Over half of all contracts awarded - 57 per cent - contain Australian content," he said.