PM welcomes Telstra, Optus NBN Co agreements

Prime Minister Julia Gillard says a big step forward has been achieved in rolling out the national broadband network (NBN).

Ms Gillard on Thursday announced Telstra, the commonwealth and the builder of the $35.9 billion national broadband network, NBN Co, had signed definitive agreements for the rollout of the scheme across Australia.

Telstra will receive $11 billion to decommission its copper network, shift customers to the NBN and allow access to its cable ducts.

The agreement is subject to Australian Competition and Consumer Commission and shareholder approval.

Optus has also reached an $800 million agreement with the federal government to move its customers to the NBN.

Ms Gillard said the agreements - which were a "big step forward" - would pave the way for a range of economic, educational and service benefits.

"The NBN is being delivered - superfast broadband is being rolled out around Australia literally as we speak," Ms Gillard said.

"(With these agreements) we will be able to see the close-down of the old copper network and its replacement with fibre-to-the-home, and that will deliver super-fast broadband to Australian families and businesses."

Broadband Minster Stephen Conroy said the agreement between Telstra and NBN Co was a great endorsement of the network.

"These agreements with Telstra represent an overwhelming endorsement of the NBN and bring super-fast broadband for all Australians, no matter where they live across Australia, another important step closer," Senator Conroy said.

He said the agreements also meant NBN Co would have greater certainty in undertaking the rollout with reduced costs and accelerated uptake.

"This is also great news for consumers who will begin to gain access to the NBN sooner," Senator Conroy said.

"Telstra's structural separation is the holy grail of microeconomic reform in the telecommunications sector."

Senator Conroy said the agreements between NBN Co and Telstra were worth an expected post-tax net present value of $9 billion to Telstra.

They provide for a minimum lease of 35 years of the telco's infrastructure to 2047 after which NBN Co has two renewal options of 10 years each, he said.

"The agreements now need to be considered by the ACCC as part of Telstra's structural separation undertaking (SSU), providing an opportunity for public consultation and I expect Telstra will submit their SSU to the ACCC shortly," Senator Conroy said.

Telstra shareholders will consider the agreement later this year.

The broadband minister said the government had also agreed to a package of measures valued by Telstra at $2 billion.

These included universal services obligations that will start mid-2012 to ensure the delivery of consumer safeguards during and after the rollout of the NBN.

The consumer protections will be administered by a new body known as the Telecommunications Universal Service Management Agency.

Senator Conroy said the agency would ensure reasonable access and continuity of the standard telephone service, pay phones, emergency call service, national relay service, public alarm systems and traffic lights.

Telstra chief executive David Thodey said the agreement marked a milestone in the history of the company.

"We think it is of great value for our shareholders, for our employees and, most importantly, for our customers," Mr Thodey told reporters.

"This comes at the end of two years of negotiations and ... it's probably one of the most complex transactions that's ever been done in the history of corporate Australia".

Mr Thodey said it signalled a "significant change" in the future of the company and would enable it to leave behind many of the things that constrained its growth.

The board was confident the agreement was the best alternative for Telstra and its shareholders, he said.

"It delivers certainty and it gives us options as we move forward."

NBN Co boss Mike Quigley said the deal was a great outcome for Australia and had been well worth the wait.

"This is a good outcome for the Australian taxpayer and a good outcome for the community," Mr Quigley said.

As part of the deal NBN would be using a substantial amount of Telstra facilities to ensure the network was built more efficiently, the NBN Co boss said.

"What's very important is that we're avoiding the wasted duplication of infrastructure that otherwise might have taken place," he said.

"This deal will ensure we can build the NBN at a lower cost, with less risk of delay (and) with less potential disruptions for consumers as we roll out the network."

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