Telstra signs $A11b National Broadband Network deal

Telstra has signed an $A11 billion agreement with the Australian federal government and NBN Co. that will see the company participate in the $A36 billion National Broadband Network (NBN).

The deal, negotiated over two years, will see customers on Telstra’s copper and hybrid fibre cable (HFC) networks migrated to the fibre optic NBN as it is constructed over the next few years.

The deal still has to be approved by Telstra shareholders, and the Australian Competition and Consumer Commission (ACCC).

The news comes on the heels of a similar $A800 million deal between the government-controlled NBN Co. and Optus.

Telstra will receive the $A11 billion over a period of years as it charges the NBN Co. for access to its existing network for the next 30 to 35 years, receives compensation payments as it disconnects customers from its copper network, and gets extra dollops of funding for its Universal Service Obligation (or USO, similar to Telecom’s Kiwishare obligation to cover non-commercial rural customers).

The Telstra shareholder vote is expected at the company’s AGM on October 18.

TelstraClear, fully owned by Telstra, has been a vehement foe of Crown fibre on this side of the Tasman. Chief executive has Allan Freeth has labelled the government’s $1.35 billion ultrafast broadband (UFB) initiative as “network socialism” that will inhibit private investment.

The Australian federal government maintains a minority stake in Telstra via its Future Fund.

New Zealand's UFB initiative has no provision for mandatory migration from copper to fibre, but opponents say the Telecommunications Amendment Bill's "averaging" of urban and rural copper pricing - which will kick in after three years - will have the effect of bumping up copper landline prices by around $20 a month in urban areas, negatively incentivising people to upgrade to fibre.

NBR staff
Thu, 23 Jun 2011

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Telstra signs $A11b National Broadband Network deal

Telstra signs $A11b National Broadband Network deal

Telstra signs $A11b National Broadband Network deal