Early trade Monday witnessed a 6.8 percent increase in the shares of Australia’s leading telephone firm Telstra Corp, after the company struck an AUS$11 billion deal on the Australian government’s proposed AUS$43 billion national broadband network.

According to the terms of the non-binding agreement, announced at the weekend, the Australian government will pay Telstra for gradually rolling over its voice and broadband services and leasing its ducts, pits and exchange space to the state-owned National Broadband Network Company (NBN).

With Telstra CEO David Thodey noting that cash payments will likely peak in years four to six of the network rollout, the deal has clearly erased some of the ambiguity that has been clouding Telstra’s shares since last September. At that time, a forced break up of the company was threatened by the government, in case of the company’s refusal to tip its assets into the NBN.

Speaking on a conference call, Thodey said that the deal was a notable milestone towards giving a position of regulatory certainty to the company, which will now have clarity enough to ascertain its needs.

Terming the deal “a net positive,” White Funds Management portfolio manager Angus Gluskie said: “It's good a deal's been done, and it looks a little better than expectations. It would have been in no-one's interest for the debate and lack of action to continue.”