Telstra is suing national broadband network builder NBN Co in the NSW Supreme Court over the timing of its payments to rent Telstra's pits and ducts for $11.2 billion.
The $11.2 billion deal, which took more than two years to negotiate, gives NBN Co rental access to the huge network of underground pits and ducts that contain Telstra's phone network. NBN Co is set to use them to house fibre optic cabling and connect homes to the high-speed fibre network.
It is understood that while Telstra believes the payments should have been indexed to 2011 when the two companies agreed on a deal, The Australian Financial Review is reporting. But NBN Co believes they should be linked to 2012 when Telstra shareholders ratified the contract.
If the court finds the case in favour of Telstra, it could mean it could get over $100 million.
Telstra spokeswoman Nicole McKechnie confirmed the legal proceedings and said the impact of the decision would be significant but not material from a market perspective.
"We have commenced legal proceedings with NBN Co over when CPI adjustments should start to apply under the NBN Definitive Agreements," she said. "We have one take on the contract and NBN Co has another.
A spokesman for NBN Co declined to comment and said the company would rely on the court's decision.