officially finished!!!!!, page-4

1. Put T3 on hold

I know this is not a popular issue, but I also reckon that if Telstra continues to spread its FUD campaign (Fear Uncertainty and Doubt), John Howard will step in and call T3 off. One could even question if Telstra is actively assisting in the collapse of T3?



The fear campaign is squarely aimed at the National Party, where there is, understandably, a great deal of anxiety about Telstra’s aggressive stand.



While I believe that, for the most part, Telstra is bluffing – and this has also been reported by some of the financial analysts – the incumbent is certainly slowing progress right down, which is not good for the country. It certainly is not in Telstra’s interest to undermine its own home market, from which comes close to 100% of its revenues and profits.



Sol has already indicated that the company has underinvested in its network over the last five years (my estimate is over the last 10-15 years). If the company continues on that course it gets further and further behind; it will see more competitors eating away at its core business; and at the same time the government will have to come up with more regulations to protect the alternative, competitive developments from Telstra’s predatory behaviour.



Is this the outcome Telstra wants? Is Telstra so worried about its financial situation that it doesn’t want T3 to happen or is it perhaps worried it will be unable to manage a fully privatised Telstra? How else can you explain their current attitude which is clearly undermining T3?



Why not get on with the job? Telstra should look at its counterparts in Europe – they seem to be able to operate in a similar environment without all the fuss Telstra is creating.



While I would be the last to underestimate Telstra’s market power, at the same time I also know that we no longer live in the 1990s, when Telstra was simply able to overbuild competitors’ networks and make them economically unviable, as they did with the Optus HFC roll-out.



However, Telstra’s relentless bullying on the issues of regulation, competition and new network investment is creating a very uncertain environment for the country. Telecommunications is too important for the nation to allow it to be held to ransom by one company whose only interest is in making profit.



These are clear warning signs for our politicians. We now know very well what Telstra’s position is on issues of national interest, competition and regional investment. Politicians can’t just put their heads in the sand. It becomes clearer and clearer that ironclad guarantees need to be in place before T3 proceeds any further. Telstra has made its position very clear on these issues, so it would be unrealistic to expect that it will look after telecoms beyond the goal of earning a healthy profit to its (new) shareholders – and even there it is not happy with the current situation. It looks as though Telstra wants the government to underwrite an annual profit for the company in the vicinity of $4 billion before the company is prepared to move ahead. I don’t know of any other company in the world that asks for such a ridiculous guarantee.



I start sounding like a broken record, but with issues such as regulations and investments I can see Telstra’s viewpoints but unless the company is prepared to sit down with the industry to discuss this there is little hope for a more sensible solution.



Before T3 happens I would like to see a full implementation of the government’s operational separation policy – not just the promise of it – as under the current circumstances this could take more than five years to implement. Furthermore, we need to see the real effect of the government’s first $1 billion investment in regional infrastructure. Initiatives like the Minister’s recently launched alternative wholesale access network are great, but can it be implemented without Telstra being prevented from undermining it? Again, operational separation will be the key to put some ground rules in place here. The last thing anyone wants to see is a total waste of this $1 billion because of Telstra’s stand on these issues.



These are very uncertain times for telecommunications. While the government is standing firm on its policies, a totally uncooperative Telstra is going to make any implementation of these policies nearly impossible. So that means the government will need to reassess its position and check how firm its implementation plan really is before anything more is done, both in relation to T3 and in relation to the allocation of valuable government funds (taxpayers’ money).



Paul Budde



See also: Government Policies Australia