Telstra boss David Thodey has signalled the company could be prepared to contemplate structural separation, even under the federal government’s new multi-technology model for the National Broadband Network, if it could be shown to add value for shareholders.

In prepared comments while delivering a strong interim profit result this morning, Thodey laid out his ground rules for ongoing negotiations with the federal government and the NBN Co — particularly, that Telstra would hold the line on maintaining the value to shareholders of its existing agreements.

Labor’s NBN provided for the structural separation of Telstra by creating a new fibre wholesale-only network owned by NBN Co, and decommissioning of the copper and HFC networks. That separation is made more difficult under the multi-technology model preferred under the NBN’s strategic review released last December, which envisages the continued operation of those networks.

Thodey said Telstra had been opposed to structural separation to date, because there were no examples around the world where it had added value for shareholders, but also added that “nothing’s off the table” and if a beneficial proposal came up in the course of negotiations it would be considered.

BBY telco analyst Mark McDonnell told Crikey that Thodey’s comments today were “a huge concession that we have never heard from the CEO of Telstra”.

“It means that the future of the NBN is so much a case of back to the drawing board — it’s not just about using different technologies, but issues like structural separation and competition are also directly engaged, when you start talking about the copper and HFC networks as part of the distribution platform, and then you add to the mix the announcements of Telstra’s competitors like TPG, which intend to use their own network to enhance broadband distribution,” he said.

“Essentially, Thodey is throwing down the gauntlet to [Communications Minister] Malcolm Turnbull that if  you demonstrate that there’s a value argument in this that works for our shareholders, then I’m potentially able to go forward and recommend it.”

Amid a strong interim profit result Telstra booked $294 million of revenue from the NBN in the six months to the end of December — a drop in the ocean compared to total revenue of some $12.6 billion, but a more substantial figure relative to net profit after tax of $1.7 billion.

Thodey told analysts Telstra was ready to assist the government with the roll-out of its preferred multi-technology NBN, including any additional role in design and construction, but would seek to reach an agreement that was: in the best interests of shareholders; maintained the value of current agreements; drove certainty of outcomes; and enhanced regulatory certainty.

Thodey would not put a timeframe on reaching any agreement but said he hoped it would be “as soon as possible”.

The $294 million included $139 million from the Infrastructure Services Agreement to build the transit or backhaul network, which will be finished by the end of the year. CFO Andrew Penn said the other revenue streams were subject to the speed of the NBN roll-out but could be expected to increase.

Telstra has now connected some tens of thousands of customers to the NBN. Analysts challenged the lower profit margins of around 20% that Telstra was targeting from the NBN connections, but Thodey said it was still early days and it would take one-and-a-half to two years, and some hundreds of thousands of connections, before a stable “run rate” could be etsablished. He was hoping for margins of 20-25%.

Some analysts have been concerned that the HFC pay-TV cable might not be fit for use in the multi-technology NBN given it was rolled out two decades ago and has been exposed to the weather. Thodey said the HFC cable network upgraded only two years ago and was in “good working condition … millions of customers seem to be very happy”.

At midday Testra shares were up almost 1% to $5.15.