Telstra and NBN Co finally sign $11 billion deal

Telstra and NBN Co finally sign $11 billion deal

Definitive agreements include extra funding from the Government to Telstra for the delivery of the universal service obligation (USO)

Breakdown of $11 billion payment from NBN Co to Telstra.

Breakdown of $11 billion payment from NBN Co to Telstra.

After some delay, Telstra has signed off on its $11 billion agreement with NBN Co.

A non-binding agreement was announced in June last year which would see Telstra gradually decommission its copper and HFC networks to migrate residential customers onto the NBN over its expected 10 year build period.

Today’s announcement included the definitive agreements over the terms and conditions of the deal as well as associated Government policy commitments.

As well as the need to be approved by Telstra shareholders at this year’s annual general meeting (AGM) in October, other factors will affect whether the deal goes through including ACCC’s acceptance of the telco’s structural separation undertaking.

Telstra will provide NBN Co with access to certain infrastructure such as dark-fibre, exchange spaces and lead-in conduits and ducts over the next 35-40 years. NBN Co may choose to extend this period for up to 20 years.

“Telstra retains ownership of all infrastructure assets, except for lead in-conduits used by NBN Co which will become NBN Co property once used,” the telco said in a statement.

Under the new agreement, Telstra will receive extra funding to deliver the universal service obligation (USO) which binds the telco to delivering services to all customers which satisfy the criteria for reasonable telecommunications service access. The deal also includes greater clarity over Telstra’ USO responsibilities in greenfield areas.

The telco has agreed on key product features and price commitments of NBN Co’s basic voice and data services, which still needs to be developed and undergo industry consultation.

“… [T]ogether with benefits from associated Government policy commitments [the definitive agreements] will produce a net result that is superior to other options realistically available to the company,” the telco said in a statement.

A portion of the $11 billion will go into asset migration costs, network maintenance and incremental operational expenses over the next few years for Telstra.

More to follow.

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Tags TelstraTelconbn coTelecommunicationsgreenfieldNational Broadband Network (NBN)USOvocie and datadark-fibre

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