14 DAY TRIAL // On June 20, Australian mobile phone carrier Telstra announced the signing of a non-binding Financial Heads of Agreement with NBN Co for the participation in the deployment of the National Broadband Network (NBN). According to the company, the transaction should result in it receiving $11 billion for the decommissioning of Telstra's copper network and cable broadband service. Moreover, the agreement would also include the use of Telstra's infrastructure.
“The value to Telstra of avoiding costs, including certain Universal Service Obligation (USO) costs” are also subject to the agreement, the wireless carrier announced in a press release. These payments would be received progressively by the company. At the same time, the deal would result in Telstra moving voice and broadband traffic from its network to NBN Co's network. “Telstra will continue to use its cable network to meet its pay TV contract with FOXTEL,” the company revealed.
According to Telstra Chairman Catherine Livingstone, the deal was settled after a series of years of negotiations. “The Heads of Agreement is consistent with the Government's high-speed broadband vision and desired industry structure. This agreement reflects a commitment by all parties to reaching a mutually beneficial outcome for Telstra investors, customers, employees and the industry,” Livingstone said.
Telstra Chief Executive Officer David Thodey added, “We will continue to work with the Government and NBN Co on the detail required to implement the principles agreed today. While today's agreement is an important step, a very significant amount of work must still be done on many complex issues.” According to the wireless carrier, these issues are related to the migration processes, taxation, the future of legacy regulations applying to the carrier, and more.
Australia's Government is not a party to the Heads of Agreement, but Telstra says it has received written confirmation from the Prime Minister that it would be able to bit for LTE wireless spectrum. At the same time, the carrier says that the Heads of Agreement is subject to approval from shareholders, and that it includes a series of conditions, including the passage of necessary enabling legislation and ACCC approval.