Telstra (ASX: TLS.AX) has at long last wrapped up its agreement to surrender its wireline assets to the Australian government for their National Broadband Network initiative.
This agreement comes after years of sometimes contentious negotiations between the government and the once monopoly service provider.
Set to be completed in 2018, the NBN will operate a wholesale open access network that will provide wireline capacity to service providers providing services to business and consumers, while Telstra will be paid for its network over the next three decades.
However, the agreement between Telstra and NBN Co. is far from a done deal. Telstra said that said that the Australian Competition Consumer Commission (ACCC) must first accept the incumbent's structural separation undertaking and approve its migration plan as prerequisites for its participation in the NBN.
In addition, Telstra needs get the approval from the majority of its shareholders, which is scheduled for its annual meeting on October 18.
As part of the transition to the NBN, Telstra will spend approximately AUD 2 billion (USD 2.1 billion) to transfer customers and maintain its existing copper network while NBN Co. is building the fiber network.
In separate but related news, competitive provider Otpus signed a separate AUD 800 million (USD 841 million) deal with NBN Co. Expected to begin the migration to the NBN network in 2014, Optus will migrate its customers over to the NBN once the network is rolled out in a given area. Right now, it can provide services to customers currently served by its HFC network.
For more:
- see the release
- Bloomberg has this article
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