NBN Co Limited and Optus have inked a binding agreement to migrate Optus’ subscribers to the National Broadband Network (NBN).

Key to the deal is the agreement by Optus to progressively migrate HFC customers to the National Broadband Network as it is rolled out.

Optus has also agreed to a fixed line network preference in favour of the NBN for residential and small business customers served by Optus’ HFC network.

In turn, NBN Co will make progressive payments to Optus based on the actual number of customers that migrate from its HFC network to the NBN.

Optus estimates the total value of the agreement as approximately A$800 million on a post tax net present value basis.

“The agreement with Optus is expected to enhance the take-up rates on the National Broadband Network, thereby improving NBN Co’s revenue plan,” said NBN Co Chief Executive Officer Mike Quigley.

Once migration is completed, Optus will decommission the parts of the HFC network that do not provide ongoing support for mobile infrastructure and business customers.

The definitive agreement reached with Optus is financially beneficial to NBN Co resulting in an improvement in NBN Co’s Internal Rate of Return when compared to the company’s Corporate Plan of December 2010.

The agreement is subject to ACCC approvals and confirmation of tax treatments.