NBN threat to Telstra overestimated

Stuart Corner
Wednesday, 29 July 2009 07:04

IT Industry - Strategy

Communications minster Stephen Conroy has exuded confidence in the NBN being able to access and use Telstra infrastructure, in the wake of a failed attempt by Telstra to assert its rights to the network under the Constitution in a High Court challenge in 2008.

Conroy, at ATUG's annual conference in March, was adamant that the High Court decision against Telstra had removed from Telstra any ability to use legal recourse to block the NBN. He told journalists: "Telstra took the access regime to the High Court and got spanked seven nil. They were told that when the bought the network they bought it with an access regime in place. Any argument about whether we can access their ducts, their exchanges and their nodes has been predetermined by the High Court."

Blair acknowledges this but says that the question of fair compensation has been ignored. "Whilst the Constitution is clear in enabling the Government to forcibly acquire assets, s51 sets out the means for 'just terms' compensation. We believe this is commonly ignored when assessing the NBN risk to Telstra."

Telstra results out on 13 August
Telstra will announce its full year results on 13 August and Blair says "The focus for the full year result is on transformation execution and free cashflow generation...We expect a solid result which is unlikely to surprise the market. The focus for us is to look beyond FY09 to FY10 as we look for evidence that the transformation will result in free cash-flow generation... Whilst Telstra (and the telco sector generally) has held up well through the recent economic weakness, we are keen to understand what the trading conditions are...We believe Australia has not entered a deep or prolonged recession and that there is the possibility of a better outlook."