Investors have reached warmly to news that Telstra (ASX:TLS) has finally reached a heads of agreement with the federal government that will see the telco giant’s infrastructure included as part of the National Broadband Network (NBN).
The deal is reportedly worth $11bn and will allow the government to roll out high-speed broadband services sooner and at a significantly lower cost. It will also avoid duplication of Telstra's fixed network, turning an asset that had been declining as consumers moved to mobile and wireless into a revenue earner.
The deal ushers in a new era of co-operation and finally closes the door years of a highly public battle between Telstra’s former CEO, Sol Trujillo and the Australian government. Changes still need to be approved by Telstra shareholders.
Telstra shares opened 21c or 6.5% higher at $3.44 today and hit a peak of $3.46, but gave ground during the day to close at $3.34
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