Telstra and NBN Co to face off in court

Telstra and NBN Co to face off in court

Dispute has risen between the two companies over when CPI adjustments should start

Telstra is taking NBN Co to the NSW Supreme Court based on a matter concerning renting the telco’s pits and ducts under its $11 billion agreement.

The deal between NBN Co and Telstra came together in 2011, but despite the fact the deal is coming under renegotiation, the two companies have conflicting ideas on when CPI adjustments should start to apply under the NBN Definitive Agreement.

It is understood that Telstra thinks it should have come into effect from January 2012 because the NBN agreement was signed in June 2011, but NBN Co thinks it should occur as of January 2013 because the SSU was finally accepted in March 2012.

The dispute is estimated to be worth about $100 million.

A Telstra spokesperson said it had not been able to reach an agreement with NBN Co through a long mediation process.

“We have one take on the contract and NBN Co has another,” the spokesperson said. “As the next step, Telstra is asking the Court to decide.

“The timing of this action has nothing to do with a renegotiation of the NBN deal, although resolving this disagreement will help provide greater certainty and as such may assist future policy discussions.”

The spokesperson said the impact over the term of the agreement was significant, but does not have a material impact from a market perspective.

The matter will appear in the NSW Supreme Court on November 8 in front of Justice David Hammerschlag.

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