NBN Co loses $200m pricing dispute with Telstra

Telstra has successfully sued NBN Co over a $200 million pricing dispute arising from how much NBN Co should pay for access to Telstra’s pits, pipes, ducts and exchanges.

Telstra took NBN Co to the NSW Supreme Court late last year over a disagreement relating to when the consumer price index (CPI) for payments covered by the pair’s 2011, $9 billion infrastructure service contract should kick in.

Telstra had argued that the CPI, which is refreshed each year in January, should apply for payments effective from January 1 2012, given that the NBN Co contract was signed in 2011.

NBN Co disputed Telstra’s argument, saying that since the Australian Consumer and Competition Watchdog-approved structural separation undertaking had commenced in March 2012, the CPI should apply from January 1 2013.

Telstra’s decision to take NBN Co to court over the dispute, which is valued at around $200 million, followed a year of unsuccessful mediation.

Justice McDougall in the NSW Supreme Court today ruled in favour of Telstra.

NBN Co is expected to appeal the decision.

An NBN Co spokesperson said the company had until August 14 to lodge an appeal and was "considering its options". 

A Telstra spokesperson said the telco welcomed the decision which 'upheld our interpretation' of the definitive agreements.