Telstra ready to renegotiate NBN deal

Dylan Bushell-Embling
15 Jan 2014
Daily News

Australian incumbent Telstra will this month commence the process of renegotiating its deal with the government to provide infrastructure for the National Broadband Network project.

Delimiter quotes Telstra CEO David Thodey as stating that negotiations are definitely due to start by the end of the month.

In March 2012, Telstra and the previous Labor government finally signed an A$11 billion ($9.85 billion) deal covering Telstra's separation, the gradual decommissioning of its copper network and an agreement to supply access to its ducts and pipes for the nationwide broadband project.

But the new Coalition government is eager to change the technology mix that will be used in the NBN, relying more on FTTH alternatives such as HFC and VDSL. The new network is expected to rely more on Telstra's infrastructure, necessitating a renegotiation of the contract.

Speculation is meanwhile mounting that Telstra may be planning to take a run at acquiring its equivalent across the Tasman, Telecom NZ.

Telstra has recently been building a war-chest of cash with divestitures including the sale of a majority stake in its Sensis directories division for A$454 million, and the sale of Hong Kong subsidiary CSL to HKT Limited for around $2.42 billion.

The company exited the New Zealand market in 2012, selling its TelstraClear subsidiary to Vodafone NZ for NZ$840 million ($702.8 million).

But experts believe the ability to operate Telecom NZ's mobile business as a component of Telstra's Australian operations would make a re-entry into the market worthwhile.

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