In its recently released 2014 annual report, Telstra has reported a $4.3B net profit after tax (a 14.6% increase from last financial year) and hinted that renegotiations with NBN Co. for the copper and HFC networks needed for the revised rollout will soon conclude.
In their message to shareholders, Telstra CEO David Thodey and Chair Catherine Livingstone AO , said:
“The renegotiation of the Definitive Agreements is progressing well within an agreed commercial framework, but the complexity of the arrangements and the need to consider all of the elements of the Definitive Agreements means the renegotiations are still incomplete. Telstra continues to work with the Government in the best interests of Telstra shareholders, and shares the Government’s aim of finalising the revised arrangements as soon as possible.”
While they stated that Telstra “should not be materially worse off under any renegotiated arrangements than under the current Definitive Agreements” they also said that as “Telstra is progressively restricted in its ability to use the copper and HFC network assets, the agreed commercial framework does not contemplate any incremental value to be received by Telstra for the transfer of ownership”.
This suggests that Telstra is unlikely to seek a greater profit windfall from the sale of the assets.
However, Telstra will seek “contractual mechanisms which are designed to protect Telstra against future changes in the project” if it is to transfer ownership of the assets to NBN Co.