Will NBN Co sign its Telstra deal this week?


blog Multiple outlets are reporting that the National Broadband Network Company is extremely close to concluding its long and convoluted negotiations with Telstra. The Financial Review and Sydney Morning Herald last week reported comments by NBN Co chairman Harrison Young that the deal could land this week, and The Australian reported today that the last negotiation point was so-called ‘break fees’:

“Telstra’s $9 billion deal with the NBN Co could be settled as early as this week and will include break fees that could be worth more than $1 billion to protect shareholders should the $36 billion rollout be abandoned or substantially revised in the future.”

The deal with Telstra is estimated to be worth about $13 billion, and will see Telstra’s customers progressively migrated onto the NBN as the network is rolled out over the next decade; as well as NBN Co given access to Telstra’s infrastructure.

Our only question is, given Telstra’s confrontational history that has seen the telco embroiled in countless disputes with other companies and the ACCC, is whether NBN Co itself has negotiated to give itself some protection … in the event that Telstra decides, as it did when its previous CEO Sol Trujillo was appointed in 2005, that it’s not going to play ball with the Government any more. Sure, Telstra’s playing nice now under David Thodey … but some of us have long memories ;)

Image credit: Delimiter


  1. Yes… lets not worry about Australia and Australia’s comms, lets just make sure those few greedy TLS shareholders are looked after…ffs!

  2. I think the deal will be done this week, everyone seems eager to get this job done finally… well everyone except Mr Rabbitt and his zoo crew chums, I imagine they’ll be calling Lifeline when it happens.

  3. “The reuse of suitable Telstra infrastructure, including pits, ducts, conduits, backhaul fibre and space in Telstra exchanges, by NBN Co as it starts to rollout its new network – avoiding unnecessary infrastructure duplication.

    As a result, NBN Co’s forecast of the estimated capex cost to build the NBN in a deal scenario is $35.7 billion compared to $37.4 billion in a no deal scenario.”

    Definitely $9bn well spent.

    • $30,000 is a bad price for a Honda steering wheel. Oh, except you’re buying more than just a steering wheel when you buy a car… but of course when you say it like that it sounds much worse.

    • @John C

      “As a result, NBN Co’s forecast of the estimated capex cost to build the NBN in a deal scenario is $35.7 billion compared to $37.4 billion in a no deal scenario.”

      $35.7 billion + $13 billion (media guesstimate) + [insert Optus figure here] = > $48.7 billion.

      It’s funny how the Telstra money comes from the fairy at the bottom of the garden and cannot be counted in the cost of rolling out the NBN.

      The OPEX CAPEX ball jugglers, all part of the accounting circus.

      • If you insist on adding OPEX to CAPEX then you also have to add in ALL the other OPEX, not just one bit relating to Telstra.

        But really, if you can’t accept there’s a difference between capital items and regular expenditure then I hope you get your tax done professionally.

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