NBN Co and Telstra sign $9 billion agreement

NBN Co recently announced that it had reached a Financial Heads of Agreement with Telstra that would provide access to Telstra facilities and the progressive migration of Telstra traffic onto the National Broadband Network, subject to regulatory approval. The agreement for these terms will have an approximate value of $9 billion.

Separately, the federal government has agreed to progress public policy reforms with an attributed value of approximately $2 billion.

“This is a sound outcome for NBN Co because when finalised it can maximise the use of existing infrastructure and accelerate the rollout of its network,” NBN Co Chief Executive Mike Quigley said. “It also means Telstra is likely to become NBN Co’s largest customer as it progressively migrates its voice and broadband traffic to NBN Co’s wholesale-only, open-access network, providing greater certainty about future revenues.”

NBN Co was established in April 2009 to design, build and operate a wholesale-only national high-speed broadband network for all Australians. In the fibre footprint, the network will deliver broadband speeds of up to 100 Mbps, subject to the retail plan chosen.

The Heads of Agreement covers the migration of subscriber traffic and the decommissioning of Telstra’s copper network and its cable broadband service. The Heads of Agreement also provides for NBN Co’s use of Telstra’s existing fit-for-use infrastructure, such as ducts, pits and conduit, and a right to acquire Telstra backhaul services and space in Telstra exchanges.