Telstra is Australia’s largest telecommunications company by far and in a surprising move today, announced that it intends to split it’s business into three separate businesses.

As part of this split, Telstra intends to divide it’s infrastructure business called InfraCo into two separate business units. The first unit will be called InfraCo Fixed which will own the fixed line networks and asssets. The second unit will be InfraCo Towers which will comprise of all the mobile infrastructure. The third and last unit will be ServeCo which will comprise of Telstra’s retail mobile business. This business will include and back-end technology as well as the spectrum.

Telstra’s chief executive Andrew Penn, has said the primary reason for this business structure is to allow the business to segregate distinct business units thereby allowing it more flexibility in the future with how it does business.

Many analysts see this move as a way for Telstra to either buy the NBN or allow it to sell distinct parts of this business for an attractive price. Splitting up the assets into clear distinctive components like this allows it much more transparency of it’s business to external parties.

The ultimate goal for Telstra is to be in a good position to purchase the NBN if it were at some point to be privatised by the government. The date that many predict that this will happen is in 2024.

Telstra’s valuable mobile network is expected to sell for a premium with plenty of companies expected to be interested. A recent valuation by Goldman Sachs has put the expected price of this network at $4.5 billion.

The news of the split has pushed Telstra shares higher today with the market taking the news favourably.

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