Australia - Telstra is now negotiating an AUD 11 billion deal with Govt as part of the NBN project

[herald sun] THE National Broadband Network was the fibre that broke the back of Tony Abbott's election hopes yesterday, but Telstra stands ready to resume talks to get things started.

Telstra shares fell to an all-time low during the election impasse, a decline analysts said was on the back of investor concerns about the outcome and the company's stake in the Labor Government's $43 billion NBN.

Labor's return to power allows Telstra to resume talks with the government and network builder NBN Co, to seal an $11 billion deal as part of the project to deliver high-speed broadband to 93 per cent of Australian homes.

Telstra's deal with NBN Co -- subject to shareholder and ACCC approval -- would see the nation's biggest telco shut down its copper network and transfer customers to the NBN, while leasing out its own infrastructure assets so the network can be built.



Telstra's chief executive David Thodey yesterday said work on the NBN could now proceed.

"We congratulate the Government on its return and will continue to engage constructively across our many areas of common interest, including working towards finalising definitive agreements with NBN Co and the Government," Mr Thodey said.

One analyst yesterday said Telstra had more pressing issues to worry about than the NBN, saying it was a long-term project.

"Telstra has major structural issues and trying to measure what the NBN is worth to them in the long term is a distant and hypothetical thing for them to do," said the analyst, who declined to be named.

"In the short term they need to be more competitive and cut prices, and that will have an impact on earnings."

BBY media analyst Mark McDonnell said the NBN deal could see the previous government's plans to split the company's retail and wholesale divisions come to fruition.

"Now that we have a differently constructed Senate, there is still a residual risk Labor's plans to force structural separation of Telstra could happen," he said.

Telstra shares closed down 1, to $2.85.

Telco giant ready to dig in