The move is part of a trend first identified by IT analysts more than 18 months ago, which will allow the utilities to share their Fibre Cable and create a network that will ultimately compete against Telstra.

The group, known as UtiliTel, already offers broadband service to regional Australia as well as the Adelaide CBD and suburbs in the ACT.

Independent telecommunications analyst Paul Budde, who is acting as an adviser to UtiliTel, said the group was currently involved in 45 projects around the country.

Budde said the network would benefit Internet service providers (ISPs) that are having trouble accessing Telstra's copper network.

"There is of course an increasing problem in getting access to the Telstra network; you really need some national, infrastructure-based competition and UtiliTel is going to do this," he said.