Australia's investment community has set mid-2014 as the date when it expects the government, Telstra and NBN Co to finalise a new three-way contract over infrastructure access.
If the stock market expectations are accurate, it would be yet another roadblock to the now-dead-in-the-water political promise that all Australians would have access to 25 Mbps by 2016.
According to the Australian Financial Review, stock analysts believe the on-hold status of the National Broadband Network project is going to give Telstra the chance to hold onto its “cash pile” for a year or more. The money the AFR refers to came from its sale of its interest in Chinese Internet business Motorhome.
To those that don't own Telstra shares, the question of whether the carrier pays its shareholders more, or instead pays down borrowings that covered its most recent spectrum purchase, is probably of marginal interest.
However, there's also this revealing remark attributed to Credit Suisse: “Credit Suisse research analyst Fraser McLeish said Telstra and NBN Co would most likely be aiming for a new deal to be finalised by mid-2014”, the newspaper states.
An access-to-copper deal is crucial to the government's plan to replace the original NBN fibre-to-the-premises design with fibre-to-the-node.
Under the original definitive agreement between Telstra and NBN Co, the incumbent was to receive $AU11.2 billion (net present value in 2011), in exchange for giving NBN Co access to its pits-and-pipes (as well as other infrastructure such as exchange access). This would have seen the copper progressively decommissioned as customers were relocated to the fibre connection (with customers to retain their existing retail relationships, and carriers to become wholesale customers of the NBN).
To roll out fibre-to-the-node, NBN Co needs access to the copper, either by purchasing the copper network outright from Telstra, or as a wholesale customer of the naked copper from Telstra – the matter which is now subject to a three-way negotiation between NBN Co, the government and Telstra.
A mid-2014 deal would set the start of the full-scale FTTN rollout – leaving the federal government just two years to achieve its “25 Mbps to everyone by 2016” promise.
That promise was already looking difficult to achieve, with the government's sixty-day review blowing out both the timing and costings promised by the new government. ®