The nation’s largest telco Telstra today said a gulf had opened up between its financial expectations and those of the National Broadband Network Company in ongoing talks between the pair about how Telstra’s assets and customers could be migrated to the new fibre network.
“Currently there is a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome, and there are also a range of commercial matters that are yet to be agreed,” the telco said in a brief update to shareholders on the status of the talks.
Telstra, the NBN Co and the Federal Government have been negotiating for months on the exact terms of which the telco would work with NBN Co on migrating its retail customers across to the planned new fibre network and other matters such as access to Telstra’s infrastructure.
Both are seen as critical factors to the success of the NBN, particularly on an economic basic. In Telstra’s half-yearly results in February, Telstra chief executive David Thodey (pictured) highlighted the complex nature of the talks.
Today Telstra said the trio were approaching the negotiations on a “business to business basis”. “Telstra is discussing ways in which the gap can be bridged, recognising that the Government has highlighted the national interest benefits of the NBN and reform of the telecommunications industry,” the telco said.
“Further, as Telstra has stated in its submissions to Government, a range of legislative and regulatory approvals will be needed for an agreement to be implemented.”
Communications Minister Stephen Conroy is currently facing difficulties in getting his wide-ranging package of telecommunications reform legislation through the Senate, with the Opposition having pledged to vote against the bill and the Greens — crucial to getting it passed — threatening to pull their support if Conroy does not table the NBN implementation study which lays out the future of the network.
Among other things, the reform package contains provisions for breaking up Telstra into retail and wholesale arms.
Telstra has also previously said it was “very concerned” about the potential for NBN Co to offer retail services in competition with other players in the telecommunications market. In exposure drafts of legislation related to the NBN Co released recently, the Federal Government left the door open for the company to supply services directly to government agencies in a move that ran contrary to its stated aim for the company only to provide wholesale services.
Despite all of this, Telstra said it remained engaged with the Government and NBN Co to “achieve a timely outcome that was in the interests of the company and its investors”.
It warned that should an in-principle agreement be reached and agreed to by its board of directors, then it would need to seek shareholder approval for the full proposal — subject to “the required regulatory approvals”.
Image credit: Telstra