One of the world’s leading investment banking firms has described the negotiations between Telstra and NBN Co as the most complex transaction they have been involved in, according to NBN co chief executive, Mike Quigley.
Early in 2010 it was revealed Goldman Sachs was appointed as an advisor by NBN Co for its negotiations with Telstra (ASX:TLS). Goldman is regarded as one of the pre-eminent investment banks in the world.
In a Senate Estimates hearing, Quigley restated the company’s view that a deal with Telstra would be a good thing for the roll out of the national broadband network (NBN).
“Telstra and NBN Co are on the record as saying it would be a good thing for the nation if we can find a reasonable outcome to this because it just makes good sense. It is the obvious thing to do,” Quigley said. “It is both good for Telstra and good for NBN Co; that is what we are both working hard towards.”
In response to a question by Greens Senator Scott Ludlum as to why we are still waiting for an outcome then, Quigley pointed to the complexity of the deal.
“Because there are very large sums of money involved,” Quigley said. “We take a view, in NBN Co, that this is public money we would be committing and spending so we are being very careful with it and making sure we analyse very carefully the net benefits. It is very complex. One thing I can quote is the investment bankers we are using have said this is the most complex transaction they have ever been involved in.”
In December, Telstra, the Federal Government and NBN Co made a joint announcement that the two companies had agreed to Terms of Engagement in their discussions on the NBN with negotiations to continue.
Telstra has since upgraded its network to fibre in the Melbourne suburb of Point Cook as a trial given observer status to NBN Co.
The Federal Government maintains negotiations are ongoing and steadfastly refuses to reveal any further information. Earlier in the Senate hearing, communications minister, Senator Stephen Conroy said the Federal Government will “never” release NBN Co’s business plan. Conroy said it would be “absurd to suggest or even think it is going to happen”. The hearing also heard NBN Co has received $260 million in equity injections to date with a further $52 million coming in the “next week or so”.