Wednesday, June 22, 2011

Optus Signs Binding Agreement with NBN Co

SingTel Optus Pty Ltd signed a binding agreement with Australia's NBN Co. to migrate its subscribers off of its HFC network and onto the new fibre-based National Broadband Network. The agreement is subject to ACCC approvals and confirmation of tax treatments.

Under the deal, Optus, Australia's second largest retail telecommunications provider, agrees to a fixed-line network preference in favour of NBN Co for residential and small business customers served by Optus' HFC network
NBN Co agrees to make progressive payments to Optus based on the actual number of customers that migrate from its HFC network to the NBN.

Optus estimates that total payments over time by NBN Co will deliver a post-tax net present value of approximately AUS $800 million.

NBN Co. said the deal brings more customers and services to the new fibre infrastructure, thereby providing an improvement in NBN Co's Internal Rate of Return when compared to the company's Corporate Plan of December 2010.

"The agreement with Optus is expected to enhance the take-up rates on the National Broadband Network, thereby improving NBN Co's revenue plan," said NBN Co Chief Executive Officer Mike Quigley.

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