Australia telcos sign onto broadband plan

SYDNEY: Australian telecoms major Telstra on Thursday inked an Aus$11 billion ($US11.6 billion) deal to switch off its national copper network and join the government's ambitious broadband rollout.

The former state monopoly also agreed to shift its customers over to the $43 billion National Broadband Network (NBN), the largest infrastructure project in Australia's history.

The NBN aims to connect 93 percent of Australians to superfast Internet by 2017, promising to transform the country's economy.

"The decision to participate was made on the basis that the proposed transaction is expected to provide us with the ability to recover more value for the business than the available alternatives, given the loss of value after the NBN policy announcements," said Telstra chairwoman Catherine Livingstone.

"The signing of these agreements is another important step, following two years of complex negotiations," she added in a statement to the market.

Canberra will pay Telstra $11 billion over 30 years in compensation for access to its infrastructure and eventual disconnection of its copper telephone network, which will be replaced by the high-speed fibre NBN.

A majority of Telstra shareholders will have to approve the deal, and Australia's competition watchdog must also first green-light a government plan to split the company's retail and wholesale arms.

The company signed an agreement in principle last June.

Formerly owned by the government, Telstra is the nation's dominant telecoms firm by subscribers and revenue.

By splitting it into wholesale and retail arms, the government hopes to loosen the firm's stranglehold on the market.

Telstra's major rival, Singapore-owned Optus, also announced a "landmark" $800 million agreement to progressively shift its fibre network customers onto the NBN Thursday, starting from 2014.

"This deal supports the NBN to create a level playing field for all telcos. Australian consumers will be the winners," said Optus chief Paul O'Sullivan.

"We intend to use the NBN to turbo-charge competition and to deliver the full potential of a 21st century digital life to customers," he added.

Copyright AFP (Agence France-Presse), 2011