Telstra stays mum over ACCC call for structural separation
- 25 May, 2009 06:23
- Comments 14
Telstra (ASX: TLS) is staying mum over calls by Australian Competition and Consumer Commission (ACCC) chairman, Graeme Samuel, for the telco to be structurally separated.
In a speech to the Australian Telecommunications User Group Regional Conference, praising the national broadband network (NBN) as being momentous, the ACCC chairman slammed Telstra’s continuing ownership of both its retail operations and the copper network.
“The NBN will spark a new wave of infrastructure investment, technological change and product innovation…this is a far cry from the current market structure, where the incumbent Telstra is vertically and horizontally integrated into telecommunications,” Samuel said.
Samuel’s speech is the latest attack on the telco and follows the ACCC’s April ruling that Telstra was overcharging for access to its last mile copper network in metropolitan areas.
Despite the outspoken criticism, Telstra has refused to bite. A spokesperson for Telstra refused to comment when contacted by ARN.
However, other industry observers expressed support for the ACCC chairman’s comments. Charles Sturt University researcher and rural ICT analyst, Peter Adams, agreed with Samuel’s calls for Telstra retail division to be separated from its wholesale division, especially if it’s selected to build the NBN.
“The people who build the network are going to make their money from the physical build. The people that are going to manage the network are going to manage it with equal pricing no matter who you are and then companies are going to compete based on their services,” Adams said.
“That’s why we’ve been having this argument, which has gone around in circles for close to ten years, about structurally separating the wholesale provider and it’s always been around Telstra because of their monopoly position.”
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Comments
George Erickson
Telstra's monopoly
It is the Australian Government that is running the country not Telstra. If they are unhappy of having their monopoly taken away from them they can pack up and go to another country and stop milking us.
Anonymous
structural separation!
As someone who worked in the Old "Telecom Australia" prior to and when the carveup of allowing optus, etc in to the country!
We internal staff had expected a split on the lines of "cable and hardware" and retail sales.
?For some reason the split was vertically orientated instead.
It should have happened then!
I'm not sure, that with the cable and hardware duplication that has ocurred since that it would be economically worth it to any of the companies to separate it the way they seem to be talking of now.
I believe that there's just too much redundancy out there now for the change to be cost efficent for anyone.
Anonymous
But the government SOLD TELSTRA and now they still want to run it... pity the people who bought it.
Optus et al are quite at liberty to build a network just like Telstra's, why don't they just do it instead of wanting to destroy Telstra shareholder value.
Anonymous
Thank the Libs for all the mess
Histoary has show that the Liberals/National party have sytimaticly sold the country out.
They sold all the assets that were owned by the Goverment.
Now the mess has just started.
Telstra should never have been sold by the Howard Goverment.
Hopefully the Rudd Goverment will put Australia on track to be up with the rest of the world in fast communications.
If the Howard Goverment had there way we will have has slow bordband for years to come.
Anonymous
Telstra is like oldest kid that got all the breaks before the parents found out they could have more.
All the infrastucture, the headquarters, the salaries and training - so many things were paid for by us taxpayers.
So you can't just say "go on fellahs, have fun with our stuff and make lots of money" because they take all the basic cables that everyone relies on and make it too expensive for the other players.
In a way, we're all Telstra shareholders. It's just that most of us are being punished for it.
www.SeeknBuy.com.au
But the investors knew
The investors knew that, one day, their investment may no longer be a monopoly. If they didn't then they should have. It was in the prospectus. And common sense dictated that a monopoly would not remain a monopoly forever.
Should someone who bought shares (invested) in Philip Morris get compensatin just because the govt is actively trying to make people stop smoking?
Investments have inherant risks. Technological change, law changes and the like are one of those risks.
Anonymous
Telstra's monopoly
Hopefully, Australia is not a communist country.
CFM
THE GOVERNMENT MUST DISBAND THE ACCC NOW
This is signs of the ACCC showing discriminatory views against one telco yet allowing other telcos like optus not to be separated, I thought the ACCC suppose to be a non bias agency, which its chairman isnt.
The government should force this chairman to stand down or disband the ACCC into separated parts where this chairman can not rule on broadband.Hie is showing his bias against one telco where the government ot put this man into his place tell him he is not allowed to show favourism
Anonymous
Stupid telstra shareholder..... Be gone!
Secondary. Optus/Telstra Apples/Oranges in terms of infustructure. For 1 telstra has alot larger copper footprint that was paid for by the australian tax payer and sold with the condition that "futher" seperation may occor.
So take you missinformation bias crap elsewhere the onyl bias that is occoring is from the Telstra shareholders like yourself crying that thier investment is not as sound as it throught. More fool you, the terms where there at time of sale, to stupid to read, not anyone elses problem!
Moh
Stupid Telstra shareholder hey??
When you build a house then sell it, do you actually expect to continue to have access to it?
You make a number of false points:
1. The fact it was built by Australian taxpayers is utterly irrelevant, the Government sold it for over $50 billion. If it wants it back, simple, buy it back!
2. Telstra's fibre footprint is very similar to Optus's. The Government would therefore have a very difficult time divesting Telstra of this asset (which Telstra built) in any court since the Aussie constitution places heavy restriction on this kind of government action (section 51)
3. Even if Telstra were split, they could only reasonably split its monopoly asset, the copper network. It would still hold its fibre and mobile assets and would use these to divert its traffic from the copper. If the NBN is to succeed, then it needs Telstra's traffic for commercial viability, something Telstra wont give it. Hence the Government and ACCC attempts to bully it into submission.
Thankfully, in this country we do have rule of law, so regardless of what the government and ACCC want, it won't be easy to get.
Andrew
Testra must be split immediately
Hey Hey. We all know who you are.
Stop fighting this loosing battle. Wherever the separation has taken place, the citizens have seen increased competition, advanced products, faster speeds and lower prices. all benefiting the consumers of those countries. Its high time we did this to telstra. Seaparate the retail from wholesale immediately.
Anonymous
Telstra is more like a road than a house, for public use
1. The government only sold 49% by simple majority it can order the directors to do whatever it likes
2. Telstra only exists because the money it makes is from other sources I doubt it has made any annual profit from fixed line phone services for years now (check it out yourself by ACN )
3. THe name is now crud if you dont respect your customers word gets around. Long term contracts are Telstra's answer - but sooner or later they expire.
Let the Stock Market Speak !!!!!
Anonymous
Wholesale arm should be non-profit jointly owned company
Separating the infrastructure arm of Tesltra from the retail is VERY good idea, but the government must make sure that the infrastructure is vested in a non-profit entity (perhaps jointly funded by govt and industry with the government having the controlling interest) whose sole purpose is to provide the best possible comms network. The comms infrastructure is like the roads - it's there for the public good - it should never set up to compete against retailers.
Anonymous
We could have a wholesale only non-profit Public Managed Group (PMG) and business could buy services from that. :)
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