Telstra launches legal action against NBN Co over index date for pit and duct payments

30 Oct 2013

Australian fixed line incumbent Telstra is reportedly suing NBN Co, the public-private company overseeing the management and construction of the National Broadband Network (NBN), in the New South Wales (NSW) Supreme Court, according to the Australian Financial Review. It is understood that the case relates to the timing of NBN Co’s payments for the rental of Telstra’s pits and ducts. With the AUD11.2 billion (USD10.4 billion) deal between the two companies having taken around two years to negotiate, it is claimed that there is a disagreement between the pair over the date at which the payments relating to the agreement should be indexed. For its part, Telstra claims that the payments should be indexed to 2011, that being the date at which the two companies agreed the deal. However, NBN Co believes they should be linked to 2012, when Telstra shareholders ratified the contract. Commenting on the matter, Telstra spokeswoman Nicole McKechnie confirmed the legal proceedings and was cited as saying: ‘We have commenced legal proceedings with NBN Co over when CPI adjustments should start to apply under the NBN Definitive Agreements,’ adding: ‘We have one take on the contract and NBN Co has another.’ Meanwhile, an unnamed spokesman for NBN Co declined to comment, only saying that the company would rely on the court’s decision. A directions hearing for the case is set to be heard on 8 November 2013.

Australia, NBN Co, Telstra (incl. Belong)