Telstra warns its deal with NBN could sour if forced to maintain copper network

Australian telco, Telstra has warned that its $11 billion deal with Labor's National Broadband Network (NBN) company could come unstuck.

The telco said the deal could come apart if it was forced to maintain its ageing copper network for those who do not want to connect to the fibre network.

Under the non-binding agreement, Telstra would get $9 billion to transfer its traffic on to the NBN and to gradually shut down its copper network with customers moving to the new fibre network.

However, fresh concerns over the sluggish NBN take-up rates in Tasmania, coupled with the ineffective methods being used by state governments to connect the new fibre cable to premises, could end up seeing large parts of Telstra's copper network in use beyond the its use-by date and in parallel with the new NBN.

Telstra chief executive, David Thodey, yesterday exposed the fragility of the agreement, a deal which according to industry experts underpins the ambitious NBN project's success.

Thodey said the commercial terms had to be such that Telstra was not left to maintain the copper in that period, otherwise the value would be destroyed. He added that it had to be done in commercial terms and that was the reason why it was the governments' prerogative to decide how to incentivise people to migrate to the new network.