Telstra will look to complete negotiations around the non-binding Financial Heads of Agreement with NBN Co by 20 December this year, with a view to gain shareholder agreement by late June 2011.
The new dates, revealed at the telco’s Investor Day this week by chief executive, David Thodey, signal a delay in initial timelines which aimed to have the agreement finalised by the end of the first quarter in 2011. Instead, Telstra will seek approval from the Australian Competition and Consumer Commission (ACCC) once agreements with NBN Co are finalised in December, accompanied by an independent expert review. A shareholder undertaking will be submitted to the watchdog in March, with plans to go to a shareholder vote at an executive general meeting to be held in June next year.
"We are actively working to complete final definitive agreements and I am pleased with the progress we are making," Thodey said at the investor briefing.
The $9 billion, 30-year agreement between the companies, provides NBN Co with the ability to utilise existing Telstra infrastructure, including ducts, exchanges and the telco’s extensive dark fibre network. Telstra also agreed to transition its cable and copper-based broadband customers over to the fibre, as well as progressively decommissioning the copper network as the NBN is rolled out. Customers will have 18 months between fibre being installed in any given area and copper being decommissioned to switch over to the network.
An additional $2 billion provided by the Federal Government as part of the agreement sees Telstra relieved of its universal service obligations and obligatory installation measures at greenfield sites.
Despite continuing assertions that negotiations with NBN Co are healthy and progressing, Telstra has flagged the fibre-to-the-home (FTTH) as a continued concern for the telco, with fears the network wholesaler could compete in the retail market in the future. It also hopes a finalised heads of agreement with NBN Co will guarantee regulatory certainty for the company from the government and the industry watchdog, even though it would seal the telco’s separated fate.
Nevertheless, Telstra will continue to plan for contingency should the NBN or the heads of agreement fail to materialise, with three-year plans to account for operations in either situation.
"We will continue to look at where it makes sense to Telstra to partake and participate in the roll out," Thodey said. "But I want to stress there is absolutely no certainty in what role we will play in this commercial environment.
"This is a day-by-day venture and we are across it all the time."
Thodey also used its Investor Day to announce the “Project New” measure, which aims to improve customer service in an attempt to revive falling PSTN revenues.
Telstra Corporation says it remains confident of reaching a final agreement with the federal government on the implementation of a national broadband network (NBN).
Additional reporting by AAP.