Telecommunications giant Telstra has announced it has formalised terms with the National Broadband Network company regarding the company’s participation in the network’s construction.
But the announcement comes as the company has lowered its sales guidance for 2010.
“Given the importance and complexity of the issues being discussed, it is too early to determine whether any final agreement between the parties will be reached or approved by all relevant stakeholders and regulators,” Telstra said in a statement.
“However, the negotiation continues to be constructive and the parties are actively working to see whether a mutually acceptable outcome is achievable.”
Communications Minister Stephen Conroy welcomed the announcement, saying he remains “optimistic that both parties can find a mutually acceptable outcome”. The NBN Co. is hoping for an agreement which will see Telstra sell off its wholesale network to the company, reducing the price of the $43 billion construction effort.
Meanwhile, Telstra has lowered its guidance for the 2010 financial year, saying revenue and earnings will grow by “low single-digit percentages”. The company said a stronger Australian dollar and competition would impact sales.
“Following the continuation of trends seen in the second half of fiscal 2009, Telstra now expects sales revenue in fiscal year 2010 to be flattish compared to fiscal year 2009,” it said in a statement to the ASX. Its previous guidance predicted low-single digit percentage growth.
The Australian share market has opened over 1% lower today after disappointing results on Wall Street, where lower-than-expected corporate results impacted investor confidence.
The benchmark S&P/ASX200 index was down 58 points or 1.24% to 4612.2 at 12.10 AEST, while the Australian dollar has also continued its fall to US88c.
Commonwealth Bank shares have decreased 0.9% to $51.63, while ANZ lost 1.2% to $21.33. Westpac fell 0.5% to $23.24, as it increased and priced its residential mortgage-backed securities issue, while NAB fell 2.3% to $26.03.
In other corporate news, ANZ has said its bad debt charges are expected to decline in 2010 and will fall even further during 2011, with chairman Charles Goode telling shareholders more stringent regulatory requirements will see the bank hold higher capital levels.
Qantas Airways has announced its budget subsidiary Jetstar is now in talks with Malaysia’s AirAsia with regards to a possible joint venture.
“Qantas confirms that its wholly-owned subsidiary, Jetstar, and AirAsia have entered discussions regarding a potential cost saving joint venture,” Qantas said in a statement to the ASX. “However, these discussions are at a preliminary stage and no binding agreements have been reached.”
The company said it would update the market on the progress of the negotiations.
Babcock & Brown Power has announced it has reached an in-principle agreement with lenders regarding the restructuring of its $2.7 billion debt, including an extension to 30 September 2010.
“The agreements announced today area major advance for the business, allowing it to proceed with an independent future under a new name and on a path to improving value,” chairman Len Gill said in a statement to the ASX. “The restructure debt facility provides the time and flexibility we need to put the company onto a sustainable financial footing.”
“It has been an extraordinarily demanding year for BBP and the board sincerely regrets that security holders have not yet seen an improvement in value.”
Queensland treasurer Andrew Fraser has turned down an offer from BHP Billiton to buy Queensland Rail’s coal freight tracks, according to the Australian Financial Review.
Fraser apparently said the state government is committed to offering an integrated coal and freight company to the market, and would not be swayed by other offers.
Overseas, Dubai’s Sheikh Mohammed bin Rashid al-Maktoum has issued a law ordering government-linked companies to transfer surplus revenue into the official treasury.
“The law requires government departments that enjoy fiscal independence as well as government-related companies to transfer surplus revenues to the public treasury as public revenues,” the rule states.
In the US, stocks have fallen with banking analyst Meredith Whitney announcing a cut in her forecast of Goldman Sachs earnings. The Dow Jones industrial average dropped 132.86 points, or 1.27% to 10,308.26.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
