Telstra expects shareholders to approve NBN participation

Australian national carrier Telstra’s often rocky relationship with the Government’s National Broadband Network (NBN) effort appears ready for a more cooperative phase. Telstra management predicts that, based on the proxy and direct voting position presented at Telstra’s annual general meeting that is under way today, its shareholders will approve participation in the NBN project.

Australian national carrier Telstra’s often rocky relationship with the Government’s National Broadband Network (NBN) effort appears ready for a more cooperative phase. Telstra management predicts that, based on the proxy and direct voting position presented at Telstra’s annual general meeting that is under way today, its shareholders will approve participation in the NBN project.

Telstra’s directors had recommended approval of definitive agreements with the Government signed this past June. A major obstacle to Telstra’s participation was the Government’s insistence that the company divorce its services business from its infrastructure operations. After often contentious negotiations, Telstra agreed to this condition.

The resolution on the NBN has received the support of 99 percent of shareholders who have voted or lodged a proxy, Telstra says. The final tally is expected later today.

Said Telstra Chairman Catherine Livingstone, “From the outset, we said we would put any proposal to cooperate with the NBN to shareholders – we consider the vote today as the most important step in the process we commenced over two years ago.

“It is clear from this interim result on the resolution that, given the alternatives facing their company, both institutional and retail shareholders are supportive of our involvement in the NBN. We look forward to finalizing the remaining conditions precedent, implementing the transaction, and realizing the benefits we expect it to deliver, including the contribution to sustainable free cash flow in the medium term and greater regulatory stability,” she added.

Acceptance of Telstra’s Structural Separation Undertaking (SSU) and approval of the Migration Plan by the Australian Competition and Consumer Commission (ACCC) is the most significant milestone remaining to be completed. Livingstone said Telstra continues to work closely with the ACCC on the SSU and Draft Migration Plan. She expects 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,” Livingstone commented. “However, if any material changes occur, we will ensure that shareholders have an opportunity to consider and vote on them. 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 alternative.”



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