A new definitive agreement between Telstra and NBN Co comes into effect today following approval from the Australian Competition and Consumer Commission (ACCC).
The new agreement reflects the planned restructuring of Telstra’s business operation, extending its rights and obligations to the new subsidiaries: InfraCo Fixed, ServeCo and its majority-owned InfraCo Towers divisions.
Terms of the agreement include Telstra’s obligation to disconnect premises in the fixed-line footprint from the Telstra copper network and hybrid fibre coaxial (HFC) connections, several aspects of competitive restraint and Telstra’s requirement to use NBN as its wholesale connection within the fixed line footprint until 2032.
The previous definitive agreements were entered into between 2011 and 2014 and facilitated the rollout of the national broadband network.
The existing agreements, authorised under the statute, provided protection for the two companies from Australian competition law, including cartel conduct.
The original agreement did not cover Telstra’s related entities.
“In our assessment, we are limited to considering the potential public benefits and detriments that flow from the restructure and not from any existing agreements,” ACCC Deputy Chair Mick Keogh said in July.
“The Telstra restructure is likely to result in some public benefits including increasing value to the shares widely held by Australian retail investors, largely by improving commercial opportunities.”
Now the new agreement is in place, Telstra’s shareholders will be able to vote on Telstra’s mammoth corporate restructure at its annual general meeting on 11 October.
Pending shareholder approval, as well as court approval, the restructure into InfraCo Fixed, ServeCo and InfraCo Towers will be completed.