Telstra inks provisional NBN deal with the government

21 Jun 2010

Australian fixed line incumbent Telstra has signed a preliminary AUD11 billion (USD9.59 billion) agreement to transfer customers from its copper network to the in-deployment National Broadband Network (NBN). The deal, announced by Prime Minister Kevin Rudd, will also see Telstra grant NBN Co, the public-private company set up to oversee the NBN project, access to its network, the Sydney Morning Herald reports. In return it is understood that Telstra will be allowed to retain ownership of its cable network, while it will also be permitted to bid for wireless spectrum in the future. Under the terms of the deal Telstra will receive AUD9 billion over several years as compensation for NBN Co utilising its infrastructure and to offset the loss of income from future fixed line customers, while a further AUD2 billion of government funding will be used to create a new company, USO Co, which will oversee Telstra’s Universal Service Obligations, retrain the telco’s staff and make NBN Co a wholesale supplier of fibre for new housing developments from 1 January 2011.

Commenting on the development Mr Rudd said that negotiations between the government and Telstra had been ‘very difficult, tough, hard’, while Communications Minister Stephen Conroy noted: ‘This agreement provides us with a clear pathway to take Australia from the copper age to the fibre future.’

The deal however still requires the approval of both Telstra shareholders and the Australian Competition and Consumer Commission (ACCC), and it is believed that the former will be able to vote on the matter in early 2011.