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- Release Date: 12/03/12 10:30
- Summary: S/HOLDER: TLS: Telstra finalises $11 billion NBN Agreements
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TLS
12/03/2012 08:30
S/HOLDER
REL: 0830 HRS Telstra Corporation Limited
S/HOLDER: TLS: Telstra finalises $11 billion NBN Agreements
9 March 2012
Dear Shareholder
Telstra finalises $11 billion NBN Agreements
Over the last three years, Telstra has undertaken lengthy and complex
negotiations with the Government
and NBN Co in relation to Telstra's participation in the rollout of the
National Broadband Network. Protecting the interests of our shareholders has
been critical throughout and, following the resounding support received at
our AGM in October last year, we are pleased to confirm that Telstra's
Definitive
Agreements with NBN Co and the Government commenced on 7 March 2012.
These Agreements and associated Government policy commitments are expected to
provide to Telstra approximately $11 billion in post-tax net present value
over their long-term life.
The Minister has also made decisions which enable Telstra to retain ownership
of our HFC network and our share in FOXTEL(TM), and Telstra's Structural
Separation Undertaking (SSU) has come into force. This Undertaking is a key
part of the regulatory framework for Telstra's participation in the rollout
of the NBN.
As was detailed in the Explanatory Memorandum published ahead of last year's
AGM, compared with other realistically available options, implementation of
these Agreements should deliver a better overall financial outcome, a more
stable regulatory environment and greater strategic flexibility, enabling
Telstra to
maintain a strong focus on our key areas of growth.
The Agreements are also expected to contribute to free cashflow generation in
the medium term, provide us with greater financial flexibility and a stronger
balance sheet, and help to offset the decline in free
cashflow expected as customers migrate onto the NBN. In this context, the
Commonwealth has confirmed that Telstra will receive a payment of
approximately $300 million this financial year as provided for in the
Agreements with the Government.
The finalisation of the Definitive Agreements and the ACCC's acceptance of
the SSU represent the culmination of some extraordinary work by a large
number of our employees. We are pleased to deliver this positive outcome for
shareholders.
As we reconfirmed at our recent Half Year Financial Results, it is the
company's intention to maintain a 28 cent fully franked dividend for fiscal
2012 and 2013, subject to the Board's normal approval process for dividend
declaration and there being no unexpected material events.
As ever, we also welcome your feedback, which can be provided to
[email protected], or in the mail to the Investor Relations
Department, Telstra, 242 Exhibition Street, Melbourne, VIC 3000.
Yours sincerely
Catherine Livingstone AO David Thodey
Chairman Chief Executive Officer
End CA:00220576 For:TLS Type:S/HOLDER Time:2012-03-12 08:30:31
