Telstra's NBN deal gets more than 99 percent shareholder support

Stuart Corner
Tuesday, 18 October 2011 12:22

IT Industry - Strategy

Ahead of the formal vote at today's AGM Telstra has revealed that the deal it has struck to participate in the NBN has received overwhelming support from shareholders.

"The resolution on the NBN has received the support of 99 percent of shareholders who have voted or lodged a proxy," Telstra said in a statement to the ASX ahead of the AGM vote.

Telstra chairman, Catherine Livingstone, said: "We look forward to finalising the remaining conditions precedent, implementing the transaction and realising the benefits we expect it to deliver, including the contribution to sustainable free cashflow in the medium term and greater regulatory stability.

"The NBN will accelerate industry change. That is why, across the company, we are well advanced in preparing for both the change and the opportunities it will create."

The critical condition precedent that remains to be satisfied for the transaction to commence is acceptance of Telstra's Structural Separation Undertaking (SSU) and approval of the Migration Plan by the Australian Competition and Consumer Commission (ACCC).

There is strident opposition to this from Telstra's competitors who are dependent on access to its network and exchange facilities in order to serve their customers.

Livingstone said Telstra was continuing to work closely with the ACCC on the SSU and Draft Migration Plan and expected to submit a revised SSU in the coming weeks. "We continue to believe that none of the issues raised by the ACCC in relation to the SSU is insurmountable and that they can be resolved in a way consistent with our principle of protecting shareholder value," she said.

She promised that shareholders would be able to vote on any 'material changes', saying: "In considering the materiality of any changes, we will take into account the costs associated with their implementation and the degree to which the proposed transaction will continue to deliver greater regulatory certainty than the best available alternatives."