Telstra Row With NBN

Written by Oonagh Reidy     30/10/2013 | 16:45 | Category: WIRELESS & NETWORKING

They were once best buds but now it seems the relationship has gone sour

Telstra Row With NBNTelstra are suing NBN Co over payments relating to the rent of the telco's pits and ducts, as part of a deal signed in 2011, it has emerged. 

The row between the two parties centres on when the CPI linked payments should be dated to 2011 or 2012 indexing. 

Telstra believes CPI should come into effect on 1 January 2012 because the NBN agreement was signed in June 2011. 

Meanwhile, NBN Co are saying CPI should come into effect 1 Jan 2013 because the SSU was ratified March 2012.

The deal which Telstra signed with NBN Co in June 2011, after protracted negotiations worth $11.2 billion  to decommissioning its copper network as the new fibre-based NBN is rolled out. 

The payments are seen as compensation for market losses Telstra will suffer as it moves from its role as access provider to access seekerA spokesperson also pointed out to CN the "considerable impact" the matter has to Telstra over the term of the agreement with NBN Co.  

No figure was given but its is believed to be over $100 million. The row is a "procedural matter" that need to be clarified , but spokesperson added" its business as usual". 

A Directions hearing is due to take place next week. Telstra has been in talks with NBN Co and the Coalition government for some time, although no timeframe on when discussion may conclude. 

The $11.2bn deal is due to be renegotiated as the new Coalition government looks to rein in cost of the circa $40bn project. The timing of this action has nothing to do with a re-negotiation of the NBN deal, a Telstra spokesperson told CN.

Although resolving this disagreement will help provide greater certainty and assist future policy discussions.

"We have one take on the contract and NBN Co has another. We have not been able to reach agreement through a long mediation process so, as provided for in the contract and as the next step, Telstra is asking the Court to decide.