Good morning, everybody. On behalf of the board and executives of Uniti Group, it gives me great pleasure to present to you this morning the details around the acquisition of the Telstra Velocity assets, which we completed late last night in the early hours of this morning. I'd like to thank at the outset Ashe-lee Jegathesan, our COO, and Darryl Inns, our CFO, who worked tirelessly on this transaction. I'd also like to acknowledge Geoff Aldridge, our newly appointed CEO of our wholesale and infrastructure business unit. These assets will form part of the W&I business unit under Geoff's leadership in the future. I'd also like to acknowledge Andy Page, our newly appointed CTO, and his team of people who worked equally tirelessly on this transaction. I'd also like to thank Telstra for the manner in which they've conducted these negotiations.
Discussions started around November 20, right on the closure of our acquisition of OptiComm. In less than a month, we've completed this transaction. I'd like to thank Telstra for the manner in which they've conducted those discussions. It was tense at times, but ultimately, commercial logic prevailed, and we look forward to a long-working relationship with Telstra in the future. Most importantly, now I'll turn to the transaction. It is a highly accretive transaction for shareholders. It significantly increases our fiber-to-the-premises footprint. It increases our competitiveness. We welcome Telstra as an RSP of our business, not only of the Velocity assets but across the wider Uniti FTTP networks. We believe we'll efficiently integrate this business, considering the nature of it and the success we've had in integration in the past. It's highly earnings-accretive and very cash-generative from the outset.
We will pay $140 million for certain assets operated by Telstra under the Telstra Velocity brand today. $85 million of the purchase consideration is upfront, and $55 million is deferred. The purchase price represents 6.7x our enterprise value as a proportion of our FY21 pro forma EBITDA. Later in the presentation, I'll also give you further details on an upgrade we'll provide to our earnings, which is, in effect, a profit upgrade from where we last presented the earnings of our business. The acquisition enhances our scale. It's highly complementary, and it is immediately earnings-accretive and an immediate earnings contribution to the business through the license fee that we've negotiated as part of the transaction.
Telstra, as an RSP, is fundamental to the transaction, and we see significant benefits to our wider business having Telstra as an RSP across our whole network, in particular, winning greater opportunities to build FTTP networks in the future. The transaction is financially compelling. It's 13% EPS accretive based on FY21 pro forma earnings. It's a 20% increase in EBITDA for the business. Our FY21 pro forma EBITDA will now be AUD 116 million. Our net leverage remains at a very modest level of 2.3 times the FY21 pro forma earnings, without any benefit from the retail shareholder placement, which I'll talk about shortly, and without any contribution from operating cash flows that we will generate in the second six months of the FY21 year.
The upfront consideration of AUD 85 million is being funded by an institutional placement, which has been carried out over the last 24 hours, and I'll talk more about that shortly. We've increased our debt facilities with the Commonwealth Bank and Westpac by AUD 50 million, with both banks taking a AUD 25 million increase in the facility. AUD 20 million of the deferred consideration is deferred, payable over the next 3 years equally, starting in December 2021. AUD 35 million of the purchase price will be payable once we've successfully migrated the assets and the active services that are currently deployed across that network. The assets we are acquiring are certain assets that support the fiber-to-the-premises services that are provided to nearly 50,000 premises across 129 estates operated by Telstra today.
Those assets are principally the access fiber and the customer premises equipment that is owned by Telstra today, and also includes electronics in fiber distribution hubs and in Telstra exchanges. As I mentioned, Telstra will become an RSP of the Uniti network, and the planning on integration as an RSP is expected to complete around March 2021. The purchase price of AUD 140 million, as I mentioned, is AUD 85 million upfront, AUD 20 million deferred over three years evenly, and AUD 35 million at the end of transition completion, AUD 35 million at the end of transition completion. I'll talk more about transition shortly. There is a mechanism to claw back purchase consideration should the services ultimately migrated at the end of transition not be the services that are operating across the network today.
In the process of acquiring the business, PwC has undertaken a valuation of the assets acquired and is valuing those assets at AUD 89 million. That's an asset valuation only and not a reflection of the value of the earnings that we are also acquiring. That AUD 89 million asset valuation is important as we will be able to depreciate those assets, and as the transaction will complete prior to December 31, 2021, we will get the benefit of accelerated depreciation benefits implemented as part of the COVID relief measures by the federal government. That is very important cash contributor in the future. As fortunately, Uniti today is a taxpaying entity, and that will present cash benefits to assist further deleveraging of our business below the 2.3 we've called out on pro forma FY21 earnings. The consideration multiple is 6.7x.
A license fee will be immediately payable by Telstra on settlement of the transaction. That settlement is expected to occur on the December 24, and the license fee will kick in at AUD 21.6 million per annum. That license fee will continue for at least an 18-month period but is expected to continue beyond July 2022. That is a fee paid by Telstra to Uniti, as Telstra will continue to maintain and operate the network, repair and replace the network, and service customers that are currently connected to the network, while both Telstra and Uniti work together on transition planning, the integration of Telstra as an RSP to the Uniti business, and the commencement of migration of the assets and services to Uniti. As the migration of services and premises to Uniti occurs, Uniti will be carrying out a technology refresh of the Velocity network's assets.
This is important in that it will assist migration and integration within the Uniti business, as we will be adopting the technology that has been deployed by OptiComm, our recent acquisition, and a prominent broadacre operator today. The adoption of the OptiComm technology and the refresh of that technology at the time of integration will assist in immediate integration of the Velocity business into Uniti. And as each premise is migrated, the license fee will cease to be paid by Telstra on a progressive basis, and Uniti will commence to invoice RSPs for the wholesale services it will provide, including Telstra as an RSP. So we will move from a license fee of approximately AUD 37 per service per month to an ARPU of what is today across our OptiComm business of about AUD 54 per service per month.
The license fee of AUD 21.6 million has been calculated very carefully, as our estimated minimum EBITDA contribution from the network post-migration of the network without any ARPU growth beyond what we're enjoying today. So what this means is the baseline earnings contribution from this asset to Uniti will be at least maintained during the period pre-migration through a license fee and then post-migration through earnings and billings to RSPs. While the license fee is paid, Telstra will, as I mentioned, continue to operate, maintain, and support the network. And during that period, Uniti will incur minimal Opex and no Capex at that point in time. As a result, approximately AUD 21 million of the AUD 21.6 million license fee will be earnings to Uniti, which will commence from December 24. So for Uniti shareholders, Santa will arrive on time.
In addition, Uniti has also entered into wholesale agreements with Telstra for the essential supply of wholesale services by Telstra required to support the networks and the customers that are serviced on that network. These wholesale agreements commence aligned with the migration of services. So our cost of sale for the provision of services to RSPs will kick in as our billings to RSPs occur. Once again, there's a matching. The license fee will fall away. The billing to RSPs will commence, and the cost of sales will implement. Telstra and Uniti have agreed terms for wholesale supply for 10 years with two five-year options in favor of Uniti and locking in a AUD 7 million per annum cost of sale to support those networks in the future. That is a guaranteed cost of sale for Uniti into the future.
In addition, Uniti has been able to secure a $2 million per annum credit from Telstra Wholesale on future services that may be acquired outside of the Velocity estates for a 10-year period. As I mentioned, Telstra will become an RSP of Uniti. This is not factored into any of the earnings forecasts that we have at the moment. We do see it as a significant benefit to the business over the long term, particularly over the next five years and enduring for 20 years. And it's fundamental and part of the strategic motivation for us undertaking the acquisition of these assets. Migration will commence, we anticipate, in July 2022. It will take approximately 12-15 months. And as I mentioned, during that time period, we will undertake a CapEx and technology refresh. This is important. It will be new technology.
We will be implementing XGS-PON technology over these fiber networks selectively throughout the estates. What that does is provide superior technology and services to premises on those networks in the future. It means higher speed plans, and that equates to higher ARPU and potentially enhanced earnings for Uniti shareholders in the future as a result of this technology refresh. The initial AUD 85 million is being funded by an institutional placement of AUD 50 million, and those discussions have been undertaken over the last 24 hours. It is fully underwritten by the Bank of America. There will be a AUD 10 million share purchase plan, which we will launch. In addition, we've increased our debt facility by AUD 50 million to AUD 265 million total debt from AUD 265 million total debt.
The deferred consideration we expect will be funded out of future operating cash flows, including the cash benefit from the license fee supported by the share placement and supported by the tax relief from the accelerated depreciation, and also supported by the continued growth in Uniti earnings, growth which we've achieved over the last six months, and I'll talk more about that when we turn to our trading update. Importantly, it is EPS accretive for Uniti shareholders immediately.
From the of December 24, when we settle this transaction, the earnings accretion will commence as well as the free cash flow from the transaction. The Velocity assets, it comprises 68,000 premises passed, 65,000 premises connected, and approximately 50,000 premises receiving high-speed broadband services today. Importantly, it's across 129 locations around Australia, 128 Velocity estates, and the old South Brisbane Exchange area in South East Queensland.
A highlight of this, I believe, is the fact that these estates are widely distributed around Australia. That distribution means, on average, there's less than 400 homes per estate, and that is defensive to any risk there may be of any perceived overbuild of these estates in the future. The assets we're acquiring are certain proprietary assets that Telstra owns today, and they include the leading cable and the fibers within those leading cables into the premises around the Velocity estates in South Brisbane, the customer premises equipment or the optical network terminal on which fibers are terminated in premises, either external to the home or internal, electronics in the fiber distribution hubs, and electronics in the exchanges.
It's those electronics that we will replace as part of the capital refresh that will enable us to provide superior technologies and speeds in the future, enable us to keep pace with continued demand for speed and data. Up until migration of these services, and migration principally involves the replacement of electronics.
As I mentioned, Telstra will continue to operate, maintain, repair, replace, and service those customers and pay Uniti a fee of AUD 21.6 million per annum payable monthly. Telstra will remain the RSP across these estates. Telstra does have a small number of wholesale customers that also resell the network that's operated today, but Telstra has been the dominant retailer across these estates and will continue to do so while the license fee applies. As I mentioned, we have secured a 10-year wholesale agreement from Telstra, which we value highly, which will support the continued operation of this network.
The two 5-year options locks in our wholesale cost of sale to service these networks for the useful life of these assets, which we expect to be 20 years or beyond. The technology refresh cannot be overplayed. It is very important that we are creating a new asset here that will keep pace with the demands in the future and will make this network superior to competing technologies such as 5G, particularly in enhanced speed and gigabit speed capabilities. The rollout, as I mentioned, 12-15 months, and Telstra and Uniti will work hand in hand, and we look forward to working cooperatively with Telstra in the same manner that we have done in enabling this transaction to complete. And as I mentioned, we're very excited to bring XGS-PON to this network for the benefit of consumers and residents of these estates.
The transaction is in keeping with our core strategy, the core strategy that Uniti has called out since the day it listed, and that is to invest in businesses with high margins, infrastructure like annuity earnings, high cash generation, sustainable long-term growth, and assets that are privileged in nature. And this business, the Telstra Velocity business, fulfills every one of those goals that we have for our business. It will ensure Uniti's financial metrics remain compelling. The EBITDA margins, the gross margins, and the cash generations are in line with what we've achieved historically or in excess of what we've achieved. It's highly complementary to our business. It will sit nicely within our wholesale and infrastructure pillar led by Geoff Aldridge and ably assisted by Andy Page. They will undertake the technology refresh and the migration.
It will integrate seamlessly and quickly because, as we mentioned, we will be implementing the same core technology that OptiComm's adopted over its broadacre estates and which is being used in the integration of OptiComm and Uniti, which has already commenced today. The Velocity estates is a finite footprint. There are 68,000 premises passed and 65,000 connected. Telstra has been the dominant retailer. On migration, Uniti will introduce all of its RSPs to service this network. We believe that will introduce competition. It will introduce superior services supported by the technology refresh. It will grow the ARPU, and it will bring great outcomes for residents of these estates, including Telstra as an RSP across these estates. That relationship, we value highly, and we value the relationship with Telstra in the future very highly.
It will be paramount to us continuing the high growth we've achieved in the businesses we've acquired to date, and the evidence of that I'll show you very shortly with our earnings update. We are transitioning to a fiber infrastructure company. That is very clear as we continue to invest in this business, and we value these businesses, the strong annuity earnings, the very high margins they generate, but most importantly, the exceptional cash generation that comes from these assets, and we expect that our free cash flow will continue to be above 50% of our EBITDA after funding our growth CapEx, giving us great confidence that we will deliver below the 2.3x our FY21 earnings in the future. As I mentioned, it's highly complementary. It is the missing piece to our business.
The recent acquisition of OptiComm, completed in November 2020, has enabled us to complete this acquisition and also enabled us to complete the acquisition in less than a month. OptiComm has vast and long-term experience in managing Broadacre assets, and this network, the Velocity network, is predominantly Broadacre. That gives us great confidence in being able to integrate, great confidence in being able to operate effectively and extract good earnings for our shareholders in the future. The highly distributed estates minimizes any overbuild risk if there was any perception that there would be overbuild risk. The Telstra Wholesale supply arrangement protects our earnings for the next 20 years, the expected useful life of the electronics that we will deploy.
These long-life assets have very strong asset backing, as evidenced by the revaluation of those assets of AUD 89 million against the AUD 140 million purchase price, and that does not include any valuation of the earnings and the cash flows that the assets will generate. Uniti's wholesale RSP businesses will also sell across this network, improving the outcomes for consumers, and we expect enhanc ed ARPU growth for Uniti.
The scale and reach of our combined FTTP networks post this transaction means we, Uniti, have moved from a startup challenger to a scaled, viable, serious competitor to other providers of FTTP networks in Australia. This is not just greenfield housing markets. This acquisition, combined with OptiComm and the other acquisitions we previously acquired, means we are now well positioned to expand beyond greenfield housing into adjacent markets. Notwithstanding that expansion, we have locked in organic growth in what we hold today.
Our contracted premises today is 220,000 in number. In June, when we were first talking about the OptiComm acquisition, we were talking 190,000 contracted premises. That is now grown to 220,000 premises. Today, we have 199,000 premises pre the Velocity acquisition. Another 65,000 puts us at 265,000 connected premises, of which 170,000 are active. Importantly, OptiComm, in addition, has 35,000 premises passed that are not connected and are not counted in that contracted order book. What that tells you is we have organic locked in into the foreseeable future that is more than double the operating network today and that will support the continued earnings growth that we've been delivering for shareholders.
When you put Telstra as an RSP across the top of that and our ability to compete more aggressively in winning the rights to build broadband networks in the future, FTTP networks across greenfield housing and the adjacent markets, your company is in great shape to continue the growth that we've been able to achieve today. Telstra as an RSP, it is highly strategic, but it is very important to us as we look to integrate and transition this network to Uniti's operation and migrate those active premises. Telstra will become an RSP across our whole network, and we expect that to be effective towards the middle of CY21, hopefully by March 2021. Uniti now, post the Velocity acquisition, we have now transformed to a fiber infrastructure company. We are now truly carrying or rightfully carrying the badge of Core+.
During the OptiComm battle, we discovered that we did attract a new title, Core Plus Infrastructure. During COVID, the world started to understand that broadband was an essential commodity. It took on the value of infrastructure. In fact, it became more valuable than the legacy infrastructure covered previously, such as toll roads and airports. Today, 76% of our earnings is Core Plus fiber infrastructure. 6% of our earnings is from our retail operation, which is principally selling across that fiber network, and to our thinking, is also Core Plus earnings. 18% of our FY21 pro forma EBITDA is from our specialty services business.
Once again, infrastructure-like earnings, AUD 21 million worth of EBITDA, all cash EBITDA pre-tax, an important contributor to delivering in the future and also contributing cash to the continued expansion of our business. Today, Uniti does not enjoy the multiple that Core Plus infrastructure attracts.
We believe the acquisition of Velocity and the understanding that the majority of our earnings moved to Core+ in nature will attract the multiples that we deserve as a truly Core+ business. A financially compelling transaction, no matter what metric you use to measure this, 13% EPS accretive, a 20% bump in EBITDA immediately starting on Christmas Eve. Leverage is only 2.3x pro forma FY21. It's a 6.7x multiple on EV based upon that FY21 pro forma earnings today. A great return for shareholders, we believe, and also highly cash generative with the license fee kicking in immediately, and there being no significant Opex or Capex being incurred at the outset of the license fee being charged. So, trading update. Well, we believe this is an upgrade in our guidance.
In June of this year, when we announced the potential acquisition of OptiComm through a scheme, we announced that the pro forma earnings based on FY20 for OptiComm and Uniti was AUD 76.7 million ex-synergies. Today, we're forecasting or we're stating that FY21 pro forma earnings based upon where the businesses are at this point in time is AUD 86 million. That AUD 86 million is made up of AUD 44 million for Uniti and AUD 42 million for OptiComm. That is a AUD 10 million bump in pro forma earnings in the last six months since we were talking to you about the OptiComm acquisition. At the time of tabling the OptiComm acquisition, we called out AUD 10 million worth of cost-only synergies. That's AUD 76.7 million EBITDA FY20 pro forma growing to AUD 86.7 million once the synergies were realized.
At this point in time, we are confident that AUD 6 million of the AUD 10 million worth of synergies will be realized by June 2021. Including that AUD 6 million of synergies, EBITDA FY21 pro forma EBITDA Uniti plus OptiComm is AUD 92 million, with another 4 million of synergies to be delivered in the second half of CY 2021. We recently acquired Harbour ISP. It joined the company with AUD 2 million worth of EBITDA. We've commenced integration, and we're well on track and highly confident that that company will achieve its AUD 3 million pro forma EBITDA by June 2021.
The results for November were particularly compelling, and we're well on track to realize that 3 million. If you put on top of that the 21 million that's guaranteed under the license fee arrangement with Telstra for the next 12 months, it means our pro forma 21 EBITDA is now at AUD 116 million.
With AUD 4 million of synergies left to realize in the second half from the OptiComm acquisition, we're well on track to exceed AUD 120 million pro forma earnings for our business. That equates to the 2.3 times net debt to EBITDA. Importantly, when you look at the leverage, that leverage to re-state does not include the benefit of any debt reductions in the second half of FY21 from the normal operations of the business, and we are continuing to generate good free cash flow after growth CapEx. There's no contribution from the AUD 10 million from the retail shareholder placement either in that leverage measure. Acquisition funding. As I mentioned, the AUD 50 million placement, excluding the share purchase plan, and AUD 50 million worth of new debt from our banks who have supported us throughout the OptiComm battle.
We thank our banks, CBA and Westpac, who responded very, very quickly in confirming their continued support of our business and in increasing our facility by AUD 50 million. The uses of those funds, 85 for the upfront, and then transaction costs and stamp duty. The stamp duty is a result of the asset valuation at AUD 89 million, and we are, in effect, giving with one hand and taking back with the other. While we do have to pay stamp duty on those assets, that is an AUD 89 million asset that we will enjoy accelerated depreciation as a result of the COVID relief measures.
The deferred consideration of AUD 20 million over 3 years and the AUD 35 million payable at the end of migration, subject to any rebates based upon the success of migration, their rebates on purchase price, will be able to be funded out of the run rate earnings of the business, out of the AUD 116 million at least in EBITDA that we're now calling out today that this business will deliver into the future.
We have undertaken an institutional placement. We have spoken with shareholders who did support us during the battle for OptiComm over the last 6-month period. In particular, those shareholders that supported us in obtaining a near 20% relevant stake in OptiComm to be able to repel the predator. We'd like to thank those shareholders for the support they've shown so far to this placement. This placement will be made at a premium to spot and our VWAP.
We understand that this is only one of only two placements this year that have been able to be achieved at a premium. I think that is evidence of the value of the transaction we've undertaken here. We'd like to thank those shareholders for their continued support. I'll take questions in a moment. I'd just like, in closing, to thank a number of people who have enabled the transaction: Lander & Rogers, our legal advisors who have worked tirelessly; Grant Samuel and Westpac and CBA who put the debt facility together in lightning speed; Bank of America who helped manage the placement and helped us achieve a placement at a premium to spot and VWAP; and also the team that have worked on this transaction. Thank you very much. Also to Telstra. Congratulations to all on achieving a great transaction for both groups of shareholders in less than a month.
I'm happy to take questions now.
Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box. Your first question comes from Kane Hannan with Goldman Sachs. Please go ahead.
Morning, Mick. Just 3 from me, please. Firstly, you just said AUD 7 million wholesale agreement with Telstra. Just confirm that's captured within the AUD 21 million Velocity earnings. And then does that backhaul give you any scope to replace existing OptiComm Uniti networks? Secondly, having Telstra as an RSP for the group, just talk about what share of greenfield tenders you think you're currently being excluded from. I suppose what the incremental upside is from having them on board. And then finally, post-acquisition, you're talking to 76% of earnings being from wholesale infrastructure. Is this as high as that can get? Or where do you see that number trending over time given there's no more, as you said, no more acquisitions out there to drive that higher? Cheers.
Yep. Thanks, Kane. The $7 million annual wholesale spend is incurred or commences in line with customer migration. So during the license fee period, there is nothing paid to wholesale. It is incurred progressively as each service is cut over, and the full $7 million is not payable until transition completion. In terms of replacing backhaul elsewhere in our network, no, it does not. The wholesale arrangement we have with Telstra applies to the Velocity estate and networks only. I did mention there are other arrangements being a $2 million credit against future spend from Telstra over 10 years for backhaul services outside of the Velocity business.
In terms of the benefit of Telstra as an RSP, both Mirvac and Stockland have made it very clear to us, both us and OptiComm, before the acquisition of OptiComm and since the acquisition of OptiComm, that they would require Telstra as an RSP for us to secure a significant amount of their business in the future. There are a number of other developers that are of a like mind, and we do have a number of contracts that are subject to Telstra as an RSP to enable retention of that business. The question around 76% being W & I are infrastructure-like. I think that will grow because we will get continued strong annuity growth in our earnings as we continue to expand our network and our footprint and continue to build both greenfield, housing, and outside. So I think it will grow.
I also believe the consumer business proportion will also increase. Our consumer business focuses on selling across our owned infrastructure, and we sell NBN by exception. So I do see W&I continuing to grow beyond that 76 through organic growth principle.
Perfect, guys. Thanks very much.
Thank you.
Once again, if you wish to ask a question on the phone, you will need to press the star key followed by the number one on your telephone keypad. Your next question comes from Ian Munro with Ord Minnett. Please go ahead. Mr. Munro, your line is open.
Good morning, Mick. I think you can hear me all right now. Just in terms of the timing of the tech refresh, can you perhaps give us a sense for how long that will take to roll out? And also, just to clarify, the cost of goods sold on the wholesale revenues once that transition is complete, is that comparable to the LBN and OptiComm wholesale revenues? Thank you.
Yeah. Ian, as you might remember, I'm an ex-accountant, so everything in this transaction is pretty much matched. I always loved the matching principle. So the license unwind is matched against migration. The cost of sales matched against the premise migration. The Capex is matched against the premise migration. The wholesale spend, as I mentioned, is matched against the customer migration. So the principle is that $21 million worth of earnings or a bit more than that that we expect Santa to deliver is expected to continue through that migration phase. So it all kicks in progressively during that whole approach, but that's clear.
Okay. Thank you. Just as a follow-up, the ongoing CapEx obligations across the network once that transition is complete? Thank you.
It will be minimal, Ian. We believe. There may be a bit of repair and replace from events, uncontrollable events and those sorts of things, but we do expect it to be minimal. It's mainly electronics in FDH, in the premises, and in the exchange that's being replaced. And it'll be minimal. At the moment, in our business, it's about AUD 1 million a year. So I don't think it's anything that is worthy of attention, really. It'll be very small.
Just in terms of the earnings upgrade, can you perhaps give us a sense for the performance across the various units at the moment? Any sort of callouts in terms of wholesale prices across the W & I segment or the performance of 1300 Australia? Thank you.
Yep. So that earnings growth that we have talked about is organic growth that's been achieved since the FY20 pro forma numbers into the FY21 pro forma numbers. The majority of that's sitting in our wholesale and infrastructure business unit. It's organic. It's an increase in active premises and therefore build services. And we've also seen an increase in ARPU, in particular in OptiComm, as the CVC bonuses implemented as part of COVID are now being unwound and CVC overage charges are kicking back in. We've seen ARPUs also push up slightly, in particular in OptiComm, where ARPUs are now pushing up towards $54. They're the major contributing factors. The consumer and business enablement and the specialty services have grown year on year, but the majority of the growth that we're calling out today has come out of our infrastructure operations.
Thanks, Mick. Just one follow-up, please. Just in terms of the D&A profile, you mentioned earlier the accelerated depreciation on the technology refresh. Can you perhaps give us a sense of what the ongoing D&A would be across that Velocity segment? Thank you.
Yeah. So accelerated depreciation is for tax purposes and not for accounting purposes. So D&A, we're working a 15-year period, I believe. Darryl and his team have landed on for the tech refresh, but the accelerated depreciation will apply for tax purposes only. And we pushed hard for a December 31 settlement to achieve the COVID benefit on depreciation, which expires at the end of the year.
Thanks, Mick. Congratulations on the transaction.
Thanks, Mate.
Your next question comes from Shuo Yang with Microequities Asset Management, who asks, "Does Velocity bring any new relationships with developers that Uniti does not have?" Also confirming they do not have any contracted future pipeline.
Yeah, Shuo, it creates the opportunity for new relationships. We and OptiComm were pursuing every developer, but having the national brand of Telstra as a reseller of your network provides greater attractiveness of our proposition for certain developers, and that will enhance the relationships. I'd like to think we have relationships, but they will be significantly enhanced, we believe, by having Telstra as a partner.
Shuo also asks, "Can you talk to the pipeline of acquisitions? Will this be exclusively focused on small ISPs similar in scale to Harbour ISP?
At this point in time, I think we're going to let Board and Bowen go on holidays. So we don't have anything in the pipeline at this time. So there is no pipeline of acquisitions. We'd like to be head down on the completion of the integration of OptiComm, embracing Velocity and starting the transition planning and the migration there in partnership with Telstra. They're our two goals for CY21. There is a lot of growth in this business in those two areas and the ability for us now to capture significant market share and also expand out of greenfield housing. We're going to be really focused on organic growth, realizing the synergies, and growing really hard into new markets. That's the focus at this point in time.
Nick Basile with Petra Capital says, "Hi, Mick. What kind of EBITDA margins do you expect to earn on the Velocity assets once migration to the 50/54 ARPU is complete? Will that be in line with broader UWL fiber businesses around 65% or higher as a result of greater scale across LBNCo, OptiComm, and now Velocity assets?
Hi, Nick. The financial metrics for Velocity are near identical to that which W & I are achieving. So we're expecting somewhere around the 80% gross margin and an EBITDA margin, probably a touch higher than what we've been achieving in W & I because there won't be the OPEX addition that we expect with Velocity. So to give you a bit of a feel for that, if you round up, let's say there's 48,000 premises completed at migration that are taking super fast broadband services, and you take a AUD 50 ARPU, bearing in mind we're enjoying a bit of it in a AUD 50 ARPU now, that's AUD 30 million worth of revenue. And you take out the AUD 7 million worth of Telstra Wholesale, you're at a AUD 23 million gross margin.
Then we've got a little bit of OpEx that's got to come out of that, and you'll see we're at that AUD 21 million EBITDA margin. We'll start to enjoy next week with the settlement of this transaction. You can see that we've designed the transaction so that we get that baseline AUD 21 million EBITDA as a minimum once migrations occur. As you can see from that simple math, the margins for the Velocity business will equal or be better than what W&I has achieved historically. More importantly, be highly cash-generative and will fund the deferred consideration as well as the CapEx progressively incurred.
Thank you. This is our last call for questions. If you would like to ask a question on the phone, please press star one. If you would like to ask one on the webcast, please type your question into the ask a question box. There are no further questions at this time. I'll hand the conference back to Mr. Simmons.
Thank you, everyone. Very happy to be addressing it today. We're very excited by the transaction. Enjoy the festive season, and hopefully in six months' time, we'll come back with another bump in earnings of the similar nature we've just given you. Thank you all.