Telstra deal: market relief, but it's only half-time

Robert Clark
22 Jun 2010
00:00

The Telstra-NBN deal must come as a relief to many of those involved but, to use a current metaphor, it’s only half-time.

After a year’s negotiation, the two parties announced a heads of agreement on the weekend.

Telstra’s stock spiked 3.4% yesterday as investors welcomed the certainty the deal offered, leading lead the Australian stock market to a one-month high.

With a national election several months away, communications minister Stephen Conroy must also be breathing easier.

It was Conroy’s brinkmanship in scrapping the previous government’s NBN plans that drove the government to create this new and much grander project, valued at as much as A$43 billion ($31b).

But the most important aspect of the deal is that one has been struck. As Ovum said, it “demonstrates a willingness on both sides of the table to progress the negotiations, and makes the prospect of a successful rollout more likely.”

Much of the detail is yet to be settled, and we don’t know a lot about that which has been agreed, but after the acrimony and uncertainty of the last 12 months it is a big milestone.

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