Telstra close to final NBN deal?

13 Jun 2011

Australian fixed line incumbent Telstra could conclude a deal with NBN Co, the public-private company set up to oversee and manage the construction of the National Broadband Network (NBN), as early as this week, The Australian reports. It is understood that the AUD9 billion (USD9.47 billion) deal between the two companies may include break fees worth more than AUD1 billion designed to protect the telco’s shareholders should the NBN rollout be abandoned or significantly revised in the future. According to the local news source, the break fees, which would be based on a percentage of the network build, ‘would not kick in immediately, but at the point where the telco has spent money on the deal.’ The pressure to include break fees, and indeed the delays in the two sides concluding negotiations over the deal, stem from continued statements by the federal opposition party that should it come to power it would scale back the project, with a fibre-to-the-cabinet (FTTC) solution mooted instead of the fibre-to-the-home (FTTH) deployment that is being undertaken under the current scheme. The agreement between Telstra and NBN Co is expected to see the former decommission its copper network and cable broadband service, while migrating its voice and broadband traffic over to the NBN, while the incumbent will also allow NBN Co the use of its infrastructure, including its pits and ducts.

Australia, NBN Co, Telstra (incl. Belong)