December 18, 2009 / 3:29 AM / 10 years ago

Australia, Telstra move closer on broadband deal

* Telstra agrees to negotiate on broadband network

* Too early to say if final deal will be made

* Government optimistic can reach deal with Telstra

(Adds comment)

SYDNEY, Dec 18 (Reuters) - The Australian government has reached a framework agreement with the nation’s dominant telecoms firm, Telstra Corp Ltd (TLS.AX), which involves upgrading the country’s fixed-line phone network to fibre-optic cable.

The former state-owned monopoly has been locked in talks with the government over breaking out its fixed-line assets from the rest of its business and contributing these assets to a government-planned $37 billion national broadband network, and over the value of its fixed-line assets. Telstra, in announcing the agreement on Friday, said in a statement that it had yet to come to a final, binding deal to achieve the government’s plan for the network, which aims to address the slower speeds of Internet connections in Australia relative to other major economies.

Communications Minister Stephen Conroy said the developments proved Telstra and could work constructively with the government’s broadband network company.

“While there are many complex issues still to be resolved before any final agreement is reached, I remain optimistic that both parties can find a mutually acceptable outcome,” Conroy said in a statement.

Telstra has said the new terms of engagement include a preferred model for any agreement on the transition of Telstra’s copper network to a national fibre to the premises network.

“Given the importantance and complexity of the issues being discussed, it is too early to determine whether any final agreement between the parties will be reached or approved by all relevant stakeholders and regulators,” Telstra said.

“However, the negotiation continues to be constructive and the parties are actively working to see whether a mutually acceptable outcome is achieveable.”

(Reporting by James Grubel)

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