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Government - Telstra - NBN Co deal delivers historic telecommunications reform



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Joint media release

The Hon Julia Gillard MP Prime Minister of Australia

Senator the Hon Stephen Conroy Minister for Broadband, Communications and the Digital Economy Deputy Leader of the Government in the Senate

Senator the Hon Penny Wong Minister for Finance and Deregulation

Government - Telstra - NBN Co deal Delivers Historic Telecommunications Reform

Super fast broadband for all Australians took another step forward today as the Gillard Government welcomed the landmark announcement by Telstra and NBN Co to enter into Definitive Agreements on the rollout of the National Broadband Network (NBN).

The Definitive Agreements will allow for a cheaper, more-efficient rollout of the NBN, which will mean Australians will begin gaining access to the NBN sooner and hasten the Government’s delivery of super fast broadband to all Australians, no matter where they live across our vast country.

The Definitive Agreements are also an important step in the reform of the telecommunications industry, paving the way for structural separation of Telstra and construction of the NBN.

Telstra’s structural separation is a critical reform that will enable the telecommunications sector to provide competitive and innovative services to Australian consumers.

The Definitive Agreements, valued at $9 billion, provide for the reuse of suitable Telstra infrastructure and for Telstra to progressively structurally separate by decommissioning its copper network and broadband HFC network capability during the NBN fibre rollout. This means less disruption to communities and less use of overhead cables.

The Definitive Agreements also include an interim agreement which provides NBN Co with immediate access to Telstra infrastructure - such as pits and pipes - to support the rollout of the second release sites on the mainland.

The interim access arrangements will mean rollout teams can start work in earnest on the design and construction of the second release sites.

The Definitive Agreements translate the Financial Heads of Agreement signed in June 2010 into detailed legally binding agreements.

Before the Definitive Agreements come into force, they require approval by the shareholders of Telstra and NBN Co. The Definitive Agreements will also be reviewed by the Australian Competition and Consumer Commission (ACCC) as part of its consideration of Telstra’s Structural Separation Undertaking which Telstra is expected to lodge with the ACCC shortly.

In support of the Definitive Agreements, the Government has provided NBN Co with a funding agreement to enable NBN Co to enter into these substantial commitments and it has also provided guarantees to Telstra in respect of NBN Co’s financial commitments to Telstra.

These support arrangements have been designed to complement each other and provide sufficient confidence to enable these Agreements - which are fundamental to structural reform of the telecommunications industry - to be entered into.

CANBERRA| 23 JUNE 2011

PRESS OFFICE (02) 6277 7744 MINISTER CONROY’S OFFICE 0408 258 457