$11 Billion Payment to Telstra Removes Hurdle for NBN's Fiber Network

Arjun Dave
23 Jun, 2011
New York City

National Broadband Network agreed with Telstra to transfer its fixed-line business for $11 billion. The wholesale network operator also agreed with Optus to transfer its cable business for $800 million. The historic agreements paved the way for the rollout of fiber optic network across Australia.

[R]5:30 PM Sydney – National Broadband Network agreed with Telstra to transfer its fixed-line business for $11 billion. The wholesale network operator also agreed with Optus to transfer its cable business for $800 million. The historic agreements paved the way for the rollout of the advanced fiber optic network across Australia.[/R]

National Broadband Network in a historic agreement with Telstra removed all hurdles for the build out of one of the most advanced communication network in the work.

NBN agreed with Telstra to acquire its copper based fixed-telecom network and begin the roll out of the fiber optic network as early as 2014.

Telstra agreed to presents its shareholders a deal of $11 billion to transfer its fixed-line business to National Broadband Network. Shareholders are expected to vote on October 18.

The deal will provide equal access to all telecom retailers and see the unwinding of its copper network.

The deal with several conditions and clauses that allow the company to terminate the agreement with the government will fundamentally change the way telecom services are prices, sold and distributed in Australia.

Telstra will now compete with all other independent carries and all of them rely on the same fiber optic network that the government will build across this thinly populated but vast continent.

NBN agreed to pay one-time upfront payment of $500 million and over the period of transferring its customers will see the rest of the $11 billion payment.

NBN will pay $4 billion to the company through disconnection as the fiber network is rolled out and will mandate the company to use its network for fixed-line services for the next 20 years.

Telstra will receive $5 billion in payment over the next 35 years to 40 years for the use of its infrastructure and save $2 billion as the government cancels the universal services obligations.

NBN also signed a deal to acquire all cable customers of Optus for $800 million over a number of years.