OVUM評論：Telstra shareholder vote on the proposed NBN deal

The Telstra shareholder vote on the proposed NBN deal was carried today, as expected. This increases certainty somewhat for the Government’s overall NBN policy and for Telstra in particular, but rejection was highly unlikely anyway.

More importantly, however, the deal remains contingent on the finalization of Telstra’s Structural Separation Undertaking (SSU) and Migration Plan, which remains before the ACCC.

Industry comment on Telstra’s draft SSU has been highly critical, and it is likely that changes will be made. The ACCC has a negotiating advantage: failure by Telstra to conclude an SSU by 31 December 2011 would activate the statutory requirements for a compulsory functional separation.  The terms of functional separation can be imposed at the Minister’s discretion after advice from the ACCC, and would most likely to be onerous.

Ultimately, Telstra must accept some form of separation, and a structural separation negotiated with the ACCC is the “least worst” option. For this reason, we expect the SSU to be resolved before 31 December.