The nation’s largest telco Telstra this morning revealed it had been forced to delay a vote to be put to shareholders regarding whether it should go ahead with its $11 billion deal to transfer customers onto the National Broadband Network as the new fibre monopoly rolls out its infrastructure around the nation.
Telstra had previously been planning to put the deal to a mass shareholder vote – but although claiming progress on the talks, this morning the telco said the timing would be delayed.
“The NBN negotiations continue to progress well, with all parties working together to agree and document the various detailed arrangements required to implement a transaction of this scale and complexity,” the company said in a statement to the Australian Securities Exchange. “A number of matters are yet to be finalised, including some that require government approval.”
“Work continues to read final agreement as soon as possible. However, there are statutory timeframes required for the necessary ministerial, ACCC and Telstra extraordinary general meeting processes which mean there is a minimum timeframe from the time the agreements are finalised to when a shareholder vote can occur. Given this, we have now reached a point where a 1 July meeting is no longer practicable.”
Telstra said it was currently looking at options for an alternative date – including considerations around its full-year results announcement – and would let shareholders know when it could set a date.
The news comes despite the fact that parliamentary progress is being made on key pieces of legislation associated with the NBN, and little more than a month after Telstra chief executive David Thodey said the telco had finalised a set of “key commercial terms” with NBN Co. It also comes more than six months after Telstra signed a non-binding heads of agreement with NBN Co, setting the framework for the detailed discussions to follow.
Overall, the deal with NBN Co will deliver Telstra a post-tax payment of about $11 billion, including recompense for decommissioning its copper network and stopping the provision of broadband over its HFC cable network. It also includes access to Telstra infrastructure such as ducts, so that NBN Co can roll out its fibre network around Australia.
In addition, Telstra customers will progressively have their fixed line connections (but not their mobile links) shifted onto the NBN network – although Telstra will continue to use its HFC cable network to deliver pay TV through its FOXTEL joint venture.
Rival Optus has repeatedly called for the full details of Telstra’s deal with NBN Co to be made public. “Telstra shareholders should have the right to sign off on that deal, but so should all Australians,” said Optus chief executive Paul O’Sullivan several weeks ago.