Fibre Uptake Key To Telstra NBN Payments
Telstra will only be paid for access to their current copper network, when consumers choose to switch to the new NBN Co fibre network Telstra CEO David Thodey has revealed.
In a conference call today Thodey said that the Australian Competition and Consumer Commission are set to play a key role in deciding the final deal between Telstra and the NBN Co and he has not ruled out the ACCC taking a look at their pitch to become a major media Company while retaining their 50% share of Foxtel.
Thodey said that the future for Telstra is new products and revenue streams. However a “significant amount of work must still be done on many complex issues.” He said.
“While this is an important step, a very significant amount of work must still be done on many complex issues, including migration processes, taxation, the future of legacy regulations applying to Telstra and consequences of any major changes to the NBN rollout schedule,” Mr Thodey said.
Outside of the NBN deal Telstra and their shareholders could benefit from tax benefits arising from the deal and the sale of the physical copper in their network as it becomes redundant.
The $11 billion agreement was announced in Canberra on Sunday by Prime Minister Kevin Rudd and Mr Thodey, which will see NBN Co reuse existing suitable Telstra infrastructure, including pits, ducts and backhaul fibre, in the roll-out of its program, avoiding the creation of a duplicate network.
A big benefit to Telstra, say analysts is that all operators will have access to the same broadband speeds with product and pricing set to be the big differentiator.
Telstra said that the agreement will reduce the overall cost of building the NBN and will see a greater proportion of the network placed underground, as opposed to overhead cabling.
Another big advantage for Telstra is that they will be able to expand their existing Next G wireless network which is currently the fastest in Australia while being able to bid for new spectrum.
The federal government had originally threatened to restrict the Telco’s access to crucial radio spectrum if it failed to structurally separate its wholesale and retail arms.
Mr Thodey said that Telstra expects to put the transaction to a shareholder vote in the first half of calendar 2011, once all necessary regulatory approvals are received and a final agreement is reached with the government.
See: Telstra Set To Be a Major Media Company