Nearly two years since it was first announced, the $11 billion National Broadband Network (NBN) deal between Telstra and NBN Co has now been finalised.
A non-binding agreement was announced in June 2010 which stipulated Telstra’s role in decommissioning its copper and HFC networks as well as gradually migrating residential customers onto the NBN over a 10 year period.
The $11 billion deal has encountered a few bumps along the way. This included uncertainty over whether shareholders would approve the agreement and the possibility the ACCC would reject Telstra’s structural separation undertaking (SSU) which was crucial to the deal.
Now that those two major hurdles are out of the way, Telstra has finalised its definitive agreement with the Government-owned NBN Co.
This is a win-win for Telstra and NBN Co. With a large cash injection, Telstra has greater financial flexibility putting it in a good position to compete in a post-NBN environment.
“[C]ompared with other realistically available options this outcome should deliver better overall financial outcome, a more stable regulatory environment and greater strategic flexibility, enabling Telstra to maintain a strong focus on our key areas of growth,” Telstra CEO, David Thodey, said.
Meanwhile, NBN Co can go full-steam ahead with its NBN rollout thanks to progressive customer migration and access to certain Telstra infrastructure which will speed up the implementation process.
With the finalisation of the agreement, the SSU approved by the ACCC last month has come into force.