TELSTRA chief executive David Thodey is disappointed with...

TELSTRA chief executive David Thodey is disappointed with planned Federal Government reforms of the telecoms industry and says many aspects of the legislation are unnecessary.

Communications Minister Stephen Conroy today announced the reforms, which pave the way for separation of Telstra's wholesale and retail operations and the implementation of the Government's high speed national broadband network initiative.

Mr Thodey said the telco was willing to discuss options around separation with the Government.

"While we are disappointed the Government has felt it necessary to introduce this legislation, Telstra remains committed to working with the Government to find a solution that is in the best interests of the industry, the nation, Telstra and our shareholders," he said.

"It is Telstra's view that many aspects of this package are unnecessary and need never be implemented if a mutually acceptable outcome can be reached on the national broadband network (NBN)."

The Government's legislation allows Telstra to structurally separate on a voluntary basis, but if it chooses not to do so the Government will be able to force a functional separation.

Functional separation would require Telstra to conduct its network operations and wholesale functions at arms length from the rest of its business.

The telco will carefully examine the reform package in the coming days, Mr Thodey said.

"At all times, our approach to regulatory reform and the NBN will continue to be driven first and foremost by the need to protect the interests of our shareholders,'' he said.

Mr Thodey added that Telstra had done a lot of work on the issues around separation and the NBN.

"We are actively and constructively engaged with the Government,'' he said.

"Much remains uncertain, but we will continue to provide updates whenever it is appropriate to do so.''

Telstra shares were down 16 cents, or 4.92 per cent, to $3.09 at 12.10pm (AEST), after trading as low as $3.08 in morning dealings.