NBN and government regulations spook Telstra

NBN and government regulations spook Telstra

Telco outlines key concerns in its annual Debt Issurance Program Prospectus

Despite a lucrative deal with NBN Co Australia’s largest telco, Telstra still has reservations over National Broadband Network (NBN) as well as government regulations in the telco industry.

In June, Telstra went into a non-binding agreement with NBN Co to decommission its HFC copper and cable network and move a portion of its customers onto the NBN. The deal was valued at $11 billion.

The full detail of the non-binding financial agreement is yet to be nutted out and while NBN Co has stated it will be a wholesale-only provider, Telstra still saw the possibility of NBN Co participating as a retail provider in the future.

With the newly elected Labor Government promising to prioritise NBN rollout to rural regions, the telco has yet to assess whether such changes would affect the company.

According to the ASX document, Debt Issurance Program Prospectus, Telstra said it welcomed the NBN but there is risk the national network will adversely impact its business.

“The exact content of that impact and of our participation in the NBN is unlikely to become clear before the conclusion of those negotiations,” the document said.

The Federal Government’s proposed telecommunications reforms legislation also continue to haunt Telstra. The bill was in limbo when the election was called but with Labor back in power, the bill is likely to resurface in parliament.

Under the legislation, Telstra would be forced to structurally separate its wholesale and retail businesses in a bid to increase competition in the industry.

The Australian Competition and Consumer Commission (ACCC) will be given extra powers to ensure Telstra gives fair access to its wholesale customers. “Telstra believes that regulation is the most significant ongoing risk to the company,” the prospectus reads. “There can be no assurances as to future policies, ministerial decisions or regulatory outcomes.

"These may be significantly adverse to our business.”

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Tags Telstranbn coNational Broadband Network (NBN)Australian Competition and Consumer Commission (ACCC)


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