After two years of trying to hold on to its monopoly it looks as...

After two years of trying to hold on to its monopoly it looks as though Telstra is finally facing the inevitable – that it is not going to get away with it. It came tantalisingly close to this in February 2007, but it was too greedy and the government had to say no.
Ever since that time it has been a downhill slide for the company. Telstra proved to be a bad loser and threw a tantrum, with Phil Burgess in charge of the performance and the company’s lawyers cheering him on, content in the knowledge that there were fat fees in the offing. (As became evident during the recent court case these lawyers were not overly concerned about the ethical issues involved.)

This behaviour only served to toughen the government’s resolve, and there is now strong evidence that, if re-elected, the government will force some kind of structural separation onto the company.

At the same time the Opposition has not retreated from its position that its broadband plans and investments would be based on an open network, and that this would also require serious structural changes to Telstra.
It could be argued that Telstra may potentially be worse off with the Opposition’s plan, so it doesn’t make business sense for it to so publicly support Labor. Politically, of course, it is clear that the incumbent is not impressed with the current government; but I question the economic wisdom of Telstra’s decision.
However, at the same time, full marks to Labor, as it seems that by operating out of the limelight they have been able to hit a sweet spot at Telstra that has enabled them to become engaged with the incumbent. As I have indicated before, it is critical for the future of telcoms in Australia that Telstra become engaged in these national discussions.
However, if the government had had its eye on the ball Labour wouldn’t have been able to make its move. They could have prevented this situation by getting their regulatory house in order before the full privatisation of Telstra.
But nevertheless at this point in time, it has been the strong bipartisan support for structural change that has now forced Telstra to reconsider its position. Of course, Telstra can save face by supporting the Opposition’s broadband plans, and that seems to be what is happening.
Phil Burgess’s over-my-dead body rhetoric was exactly that – rhetoric – because Telstra is now suddenly prepared to look at infrastructure-sharing options, and even at structural separation.
As I have mentioned before, I would not be at all surprised if Telstra actually went for structural separation. I have always maintained that structural separation would increase its value and significantly decrease its costs.
I have also suggested that this would result in very significant bonuses for Sol and his management colleagues, worth tens of millions of dollars. This must be a huge incentive for such a money-driven team.
I believe that it is no longer a question of ‘if’ but ‘how’ – implementation has become the big issue. I believe that drastic changes are about to take place. The question is whether they will be in the national interest, so we still must be extremely vigilant regarding Telstra’s plans.

Paul Budde

Within days of submitting our complaint we had the Telstra call centre phoning us. I nearly fell off my chair – the person on the other line (Alex) was one of the friendliest and most professional call centre operatives I have ever dealt with. He genuinely went out of his way to help us find a solution, and he is still following up with us in that process.



So, please assist me in getting the message out to the people in regional Australia who don’t have NEXT G coverage – use the Minister’s complaint line (1800 883 488). There will be little hope for the people who have missed out on getting a NEXT G connection once the election is over.