Australia - National Broadband Network - Telstra


Soon after the Australian government announced the national broadband network in 2009 Telstra accepted that changes were inevitable, and it reacted swiftly. A new management team was appointed and the company announced its support for the NBN and its willingness to work with the government. The company also put its weight behind the trans-sector concept that will be the avenue to generating new revenue. In particular they have since shown increased interest in cloud computing.

In 2012 Telstra finalised an $11 billion contract with the government, which saw the company making infrastructure assets available to NBN Co and agreeing to switch off its copper network after the NBN has become available. It also entered the NBN retail market.

These massive changes propelled the company into a transformation process which saw it competing aggressively with its rivals, particularly in the mobile market. It has ramped up its customer service and introduced innovative new services. So far so good, as the company has become one of the most financially successful telcos among the developed economies.

Telstra’s position in the NBN is pivotal and the company’s dominance has increased since the Coalition Government’s plans require a greater participation from the company. These contracts negotiations were finalised in late 2014 and ratified by the ACCC in mid 2015.

Key developments:

NBN, structural separation, sector transformation, e-health

Companies mentioned:

NBN Co, Telstra, FOXTEL, Sensis.

Table of Contents

  • 1. Synopsis
  • 2. New contracts added to Telstra’s work in 2015
  • 3. Telstra – NBN Co deal 2.0
    • 3.1 Analysis of the new situation
      • 3.1.1 Assessment based on the new plans
      • 3.1.2 Moving towards a deal on the copper
      • 3.1.3 Telstra will also need to remain strategic about the infrastructure
  • 4. The original agreement
    • 4.1 Two years of negotiations
    • 4.2 More than two years delay
    • 4.3 Analysis of the agreement
    • 4.4 Definitive Agreement signed and sealed
  • 5. Telstra Structural Separation Undertaking
    • 5.1 Telstra’s initial undertaking
    • 5.2 Telstra’s final undertakings analysis
  • 6. Analysis
    • 6.1 Transforming the company
    • 6.2 Pre NBN competition
  • 7. Telstra’s Transformation
    • 7.1 e-Health
    • 7.2 High Definition rural e-health services
    • 7.3 Cloud computing initiative
      • 7.3.1 Analysis of Telstra’s cloud coup
  • 8. Related reports
  • Table 1 – Total payments to be made to Telstra – 2012 - 2020
  • Table 2 – NBN deal valuation cash flows
  • Exhibit 1 – Updated financial arrangements

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Broadband Fixed
Companies (Major Players)
Regulations & Government Policies
Strategies & Analyses (Industry & Markets)

Number of pages 13

Status Archived

Last updated 21 Dec 2015
Update History

Analyst: Paul Budde

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