Telstra will retain its 50 percent stake in FOXTEL, where it's "business as usual".

FOXTEL’s 1.6 million householder subscribers will continue to receive service over the Telstra cable network, after fears of seeing the service divested under the government’s national broadband network shake up.

The government’s new deal with Telstra will see the telco migrate its entire copper and cable telephone and broadband service over to the new $43bn national broadband network, leaving FOXTEL with continued use of the existing network infrastructure.

In addition, the telco will retain its 50 percent stake in FOXTEL, which is shares with News Corporation and Consolidated Media Holdings — both of which are keen to expand their pay-TV market.

Currently, FOXTEL pays an arm’s-length rate to access Telstra’s cable network — one of the benefits of having a 50 percent stake owned by a telco. However, with the infrastructure set to be switched off at some point in the future, FOXTEL could eventually move to the faster NBN.

“FOXTEL would probably want to be in the NBN anyway because in 10 years’ time the network will reach every home, rather than 2.5 million households in the major cities,” said one analyst.

It’s “business as usual” for FOXTEL, but “in the long term, FOX could be a bigger business.”

Source: The Australian