Telstra reaches agreement with Australian government over NBN

Australian communications giant Telstra has finally reached an agreement with the Australian government with regards to the National Broadband Network.

Months of speculation have been brought to an end recently after the announcement that Australian communications giant Telstra has finally signed a deal with the government with regards to the rollout of the National Broadband Network. Under the agreement the Australian government will be given access to the copper wire and cable network belonging to Telstra, and the network is set to be upgraded to a fibre optic one.

The deal is set to earn Telstra around eleven billion Australian dollars, and the agreement comes after many months of negotiations with the government with regards to the role that Telstra will play in the rollout of the broadband network. Telstra operates the only national communications network in Australia, and therefore its participation in the rollout of the NBN has been seen as crucial.

Under the new agreement the government will effectively be leasing the network from Telstra. Officials have said that the finer details of the agreement are still being finalised. However, Catherine Livingstone, the chairperson at Telstra, said: “mutually beneficial outcome for investors, customers and employees” after a year of “complex negotiations”.

Shareholders will be pleased about the deal, as it means that Telstra will be able to retain its stake in Foxtel, the pay TV firm. Previously, the government had tried to force the communications giant to sell its stake in the company. The government is, however, still trying to force Telstra to make a split between its wholesale and its retail operations.

Source – BBC