Telstra agrees Australia broadband deal

Telecoms giant Telstra has agreed a deal with the Australian government over the building of a new national broadband network.

The deal will give the government access to Telstra's ageing copper wire and cable network, which will be upgraded to fibre optic.

Telstra said the agreement would earn it at least A$11bn (£6.5bn; $9.6bn).

Both sides have been in negotiations over Telstra's role in the roll-out of broadband services for months.

Telstra's participation is regarded as crucial as the former government-owned company operates Australia's only national communications network.

The agreement, the details of which are still to be finalised, will effectively see the government leasing Telstra's network.

Telstra's existing voice and broadband traffic will also be migrated onto the new high-speed network.

The company's chairman Catherine Livingstone said the deal represented a "mutually beneficial outcome for investors, customers and employees" after a year of "complex negotiations".

The deal will spell good news for shareholders as Telstra will be able to retain its stake in pay TV firm Foxtel.

The government had previously threatened to force the company to sell its stake.

However it is still pursuing legislation to break up the company into its wholesale and retail operations.