Telstra separation announced next Thursday?

The eerie quiet that has descended over the once very public stoush between the Federal Government and Telstra (ASX:TLS) could be the clearest indication yet that a deal on the separation of the telco is close at hand.

Speaking to Computerworld, telecommunications industry analyst Paul Budde said an announcement on a deal for Telstra’s separation could come as early as Thursday next week when the company is due to hold its half yearly results shareholder meeting.

“The fact that it has been so quiet the past two months is a good sign that the issue is on the way to getting resolved,” he said. “Given the shareholders meeting next week, there may have been some grace given to Telstra to let them announce the changes at their shareholder meeting."

Budde added that such an approach could be a factor behind the Federal Government’s late January decision to push back the hearing of its Separation Bill in the Senate.

“It could well be strategic for the government to wait till next week, let Telstra make their announcement and then push the separation bill through the Senate a bit later in the month,” Budde said.

Before the first sitting of Parliament this year, a spokesperson for communications minister Stephen Conroy said the senator plans to have the Separation Bill to be heard "this year" but could not make the next sitting in the first week of February because of "more pressing considerations".

The Government's moves to force Telstra's separation are seen as key to much of its National Broadband Network (NBN) plan, with NBN Co negotiating with Telstra over its network assets.

Despite the often vehement opposition of Telstra and its shareholders over the move, others, particularly rival telco players, have suggested the separation is a necessary evil to improve competition in the industry.

Some telco analysts have also said the future of a separated Telstra is rosy, one even suggesting it is the deal of the decade. Although, Telstra CEO David Thodey has publicly stated his opposition to separation in the past.

In December, Telstra and NBN Co announced they had failed to reach commercial terms before Christmas in their negations over the NBN but in statements said they had formalised "Terms of Engagement" to facilitate the telco's possible role in the network. The terms include a preferred model for a potential agreement between the parties "that would see a progressive transition from Telstra's copper access network to a fibre to the premises NBN".

Commercial wholesale arrangements for NBN Co's use of Telstra's extensive infrastructure including ducts and exchanges are also being discussed under the terms.

At the time Telstra said it will also upgrade its network to fibre in the Melbourne suburb of Point Cook immediately as a field trial to evaluate the "practical issues" associated with moving to a fibre network and provide NBN Co with the resulting information.

Around 1500 customers will have the option of migrating to the fibre network once the rollout is complete around May, 2010, or retain their copper connection.

The telco will also offer an interim wholesale offering on the fibre network and provide details of the retail and wholesale offerings when the construction is near completion.

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