By - Sonal Goyal
- ACCC has granted authorisation to amendments for Telstra and NBN agreements on 15 September 2022.
- The authorisation has come into effect today (7 October 2022).
- The amendment to the agreement allows the extension of protection to Telstra’s related entities.
Telecommunication services provider, Telstra Corporation Limited (ASX:TLS) on Friday (7 October 2022) shared that Australian watchdog - ACCC (Australian Competition and Consumer Commission) has granted authorisation to Telstra and NBN Co to amend the definitive agreement on 15 September 2022 and that authorisation has come into force today.
With the amendments to the definitive agreements, Telstra can now proceed with the proposed scheme of arrangements. Reportedly, getting authorisation from the Australian competition regulator was one of the conditions precedents to the scheme.
To implement the scheme, shareholders and court approval are still pending. According to the announcement, the scheme meeting is expected to occur on 11 October 2022.
Back in July 2011, NBN Co and Telstra inked multiple long-term agreements with the aim of rolling out the national broadband network (NBN). In 2014, amendments were made to the definitive agreements to highlight the changes introduced to the rollout of the NBN.
The original statutory authorisation does not extend to related entities of Telstra because, at the time of authorisation, Telstra did not have related entities that had responsibilities under the definitive agreements.
Telstra is taking up the legal restructuring of the group. To ensure that definitive agreements operate as per the intended goal, some amendments would be required. These amendments would ensure that existing protection is extended to Telstra-related entities.
After the amendment, certain obligations and rights are extended to Telstra Limited. The new agreement also includes the creation or change of certain obligations and rights to reflect the inclusion of Telstra Limited and its related new entities.
The national broadband network of Australia is replacing cable broadband and copper wires with optical fibre and different technology that would offer high-capacity and more reliable internet in the home.
The design of NBN allows one to future-proof a home, as per the official website of Telstra.
Telstra shares were spotted trading at AU$3.82 per share at 11:52 AM AEDT, down 1.42%. Meanwhile, the benchmark index, ASX 200 Communication (INDEXASX:XTJ) was down 1.01% to 1,378.30 points at 12:13 PM AEDT.
In the past six months, Telstra’s share price has dropped 6.66% (including today’s fall), and on a year-to-date basis, it has declined 9.60%. In the last 12 months, the share price has fallen 1.42%, and in five years, it has marked a rise of 8.38%.