Telstra says gap between parties

MELBOURNE: - Telstra says there is a significant gap between it and NBN Co on the financial outcome of the proposed national broadband network (NBN).

It said yesterday that recent media articles had speculated on the status of its talks in relation to the NBN.

The talks, which are focused on the future of Telstra's fixed local access network and associated matters, were continuing. Telstra, the Government and NBN Co were approaching the talks on a "business-to-business basis".

"Currently there is a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome, and there are also a range of commercial matters that are yet to be agreed," Telstra told the ASX.

Telstra also was discussing ways in which the gap could be bridged, recognising that the Government had highlighted the national interest benefits of the NBN and reform of the telecommunications industry.

Telstra said a range of legislative changes and regulatory approvals would be needed for an agreement to be implemented.

"As Telstra has noted, should an in-principle agreement be reached and the Telstra board recommends a significant change to the nature or scale of Telstra's activities then, subject to the required regulatory approvals, the board intends to seek shareholder approval for the full proposal," it said.

Telstra is negotiating with the Government and NBN Co, the company charged with rolling out the federal Government's A$42 billion high-speed broadband network, on the implementation of the project, which could see some of Telstra's infrastructure integrated into the network.

The Government is committed to breaking up Telstra's retail and wholesale arms to introduce greater competition into the telecommunications sector.

Telstra said this month that it was concerned that draft laws that would govern how NBN Co operates and is regulated could create a retailer rather than a wholesale network provider.

Legislation states NBN Co is to be a wholesale-only company but it gives the Communications Minister significant powers to allow it to conduct retail services.

- AAP