Telstra and NBN Co settle CPI dispute

Telstra and NBN Co have reached a confidential settlement in their dispute over the value of their AU$11 billion deal.

Telstra and NBN Co have settled a lengthy dispute over the value of their AU$11 billion deal, with terms of the agreement kept confidential.

After two years of negotiations, NBN Co and Telstra struck a deal in 2011 that would lease Telstra's pit and ducts infrastructure to NBN Co for the rollout of the fibre-to-the-premises National Broadband Network (NBN) and pay Telstra to shift its customers from the copper network over to the NBN.

Although the agreement was signed by the two companies in mid-2011, Telstra shareholders did not approve the deal until the Annual General Meeting in late 2011.

Telstra argued that the consumer price index (CPI) should have come into effect on January 1, 2012, while NBN Co believes it should have come into effect on January 1, 2013.

Telstra and NBN Co first went to court in 2013, and in July 2014, the NSW Supreme Court ruled that NBN Co had to pay Telstra an extra AU$200 million to account for CPI adjustments for Telstra's start date of the deal.

NBN Co planned to appeal the case, and the two companies were due to appear in court last week, but called off the hearings.

A spokesperson for Telstra said in a statement that the dispute had been settled.

"The parties have reached agreement on a commercial resolution to this matter," the spokesperson said.

The terms of the agreement have not been disclosed.

A spokesperson for NBN Co had not responded to a request for comment at the time of writing.

Since the commencement of the case, NBN Co and Telstra have completed renegotiations over the agreement that will now see NBN Co gain ownership of the copper network and hybrid fibre-coaxial networks owned by Telstra for use in the multi-technology mix rollout of the NBN.