Thodey reassures shareholders on NBN
Telstra chief executive David Thodey and chairman Catherine Livingstone have issued a joint pre-Christmas letter to shareholders advising them that the $11 billion deal with the government to move onto the National Broadband Network (NBN) would not be signed this year, but that the company was working to get it done.
"We previously stated a desire to complete definitive agreements with NBN Co by the end of the year. Due to a number of key NBN Co and government decisions remaining outstanding or taking longer than expected this has not been possible," Thodey and Livingstone said in a letter to shareholders posted on ASX today.
"With the release of the NBN Co business plan on 20 December 2010, we now have more certainty on key issues such as points of interconnect and NBN Co's pricing. All parties continue to work on resolving the outstanding issues and we continue to seek fair value for you, our shareholders," the letter continued.
Communications Minister Stephen Conroy confirmed yesterday that the deal would likely be finalised in the first week of January.
The pair said the company would continue to negotiate with the government and Telstra was focused on having the agreement finalised by the middle of 2011 in time for shareholders to vote on.
Thodey stressed that the passing of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 at the end of last month would not have any great impact on the business in the immediate term thanks to the NBN deal.
"It is important to understand that, as pointed out in the Bill's explanatory memorandum, the structural separation requirements of the Bill would be satisfied by our agreement with NBN Co to decommission our copper network over the next decade and migrate services onto the NBN as it is rolled out," the letter stated. "It will not involved an artificial and expensive split of the wholesale and retail parts of the company."
In the meantime before the deal is voted on by shareholders, Thodey and Livingstone said the company would continue discussions with the government around implementation of Universal Service Obligation reform and other NBN-related issues.