Telstra CEO calls for quick NBN deal renegotiation

Telstra has given its strongest indication yet that it would like to see any changes to the AU$11 billion deal happen quickly.
Written by Josh Taylor, Contributor

Following the decisive victory of the Coalition in Saturday's Australian election, Telstra CEO David Thodey has said that he would like to see a renegotiation of its AU$11 billion National Broadband Network agreement be resolved quickly.

The original agreement that the Labor government negotiated with Telstra and NBN Co over two years gives NBN Co access to Telstra's pit and ducts infrastructure for the NBN rollout, and pays Telstra each time a customer is transferred over from the copper network onto the NBN.

In order for the Coalition to be able to forge ahead with plans to switch from a fibre-to-the-premises network to a fibre-to-the-node network, this deal will need to be renegotiated to access the last section of the copper line from the node to the premises.

Prior to the election, then-Shadow Communications Minister Malcolm Turnbull said that he didn't expect to pay Telstra any more money to access the copper line. Telstra has always maintained that it will keep the value of the existing deal for its shareholders, but has declined to go any further.

In a statement released today, however, Thodey congratulated the Coalition on its election win, and said that he wants to see a deal renegotiated quickly.

"We will engage constructively with the Coalition government on how we can best help them deliver their NBN policy commitments," he said.

"The new government has committed that they will seek to renegotiate our NBN agreements and keep Telstra shareholders whole. We will look to help facilitate this quickly, with a view to minimise uncertainty.

"While any negotiation takes place, our priority will remain to be focused on meeting our existing commitments and winning customers on the NBN where it is available."

Thodey also indicated that Telstra is interested in engaging with the government outside the area of the NBN.

"The NBN will obviously be a focus for us, but we're also interested in engaging on telecommunications more broadly, as well as innovation, regional economic development, trade, and digital economy policies, among others."

Ovum telecommunications research director David Kennedy said today that although the change in the NBN design is a potential threat to Telstra, the new NBN under the Coalition could offer more opportunities for Telstra to be involved in the project.

"We consider it likely that the new government will call on Telstra's extensive expertise in network construction to accelerate the rollout, and this will generate further revenue for Telstra," he said.

Kennedy said that a failure for the Coalition to quickly renegotiate the Telstra deal and restructure NBN Co's management and strategy could make it impossible to meet the target set for the NBN to have download speeds of at least 25Mbps by the end of 2016.

Editorial standards