yARN: Leave Telstra alone
- 19 September, 2009 08:00
- Comments 2
As the Communications Minister, Stephen Conroy, launched into his morning press conference announcing the Government’s move to divide Telstra by force, voices of celebration rose up across the land.
From Optus and AAPT to analysts and politicians, the glee was barely containable.
“It is a landmark decision that has the potential to change the entire telecommunications landscape forever, resulting in considerable benefits for all Australians,” Optus Chief Executive, Paul O’Sullivan, said.
But there is a very fine line between applauding a good decision and gloating unfairly over a fallen foe.
“The sector has been dysfunctional and that has been largely driven by Telstra's behaviour,” Optus director of government and corporate affairs, Maha Krishnapillai, added.
Even the Australian Competition and Consumer Commission (ACCC) chairman, Graeme Samuel, took a bite out of Telstra’s prone body in an article for The Australian.
“I call it a telco revolution. It is a quantum leap for competition and consumers, and the ACCC welcomes what is being proposed,” he said.
But the besieged giant threatened with fundamental dismantling stood quietly to one side, mumbled its disappointment and moved along.
“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,” Telstra CEO, David Thodey, said in the telco’s only media statement on the issue.
It’s undeniable that Telstra under its former CEO, Sol Trujillo, was a public relations disaster. Thumbing its nose at rivals, customers and the Government alike, it was inevitable that comeuppance was just around the corner.
But in recent months since Trujillo’s departure, the telco has revitalised and changed course.
The well-respected David Thodey has been running the ship amid a series of high-level board replacements and major executive team changes.
Telstra had emerged making all the right noises; encouraging cooperation with governments and infrastructure development for customers. While many in the ICT industry are rightly jaded having heard years of spin from Trujillo, not one organisation has arguably given Telstra the credit it deserves.
Despite Conroy’s claims of giving Telstra the “flexibility to choose its future path”, the legislation is all about the stick with nary a carrot in sight.
“Telstra will be prevented from acquiring additional spectrum for advanced wireless broadband while it…remains vertically integrated; and owns a hybrid fibre coaxial cable network; and maintains its interest in Foxtel,” the minister’s statement said. “If Telstra chooses not to structurally separate, the legislation provides for the Government to impose a strong functional separation framework on Telstra.”
In simple terms, Telstra is being given the ‘choice’ between a lobotomy or commercial stagnation. Despite the best efforts of Thodey and his newly developed team, his company now faces a sledgehammer to the body, a tsunami of angry shareholders and a flock of vultures circling overhead.
So the next time you go to cackle over the fallen tall poppy, spare a thought for those within Telstra that pushed for change along with the millions of mum and dad investors who could lose a lot of dosh.
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Comments
Lex of Sydney
Careful what you wish for
Telstra has been its own worst enemy - PR disaster, service problems and high prices as it replaced all its IT systems. People celebrating the end of Telstra should be careful what they wish for though. Who really thinks that a government run monopoly is good, an ACCC regulator that throws away independence to praise the government, and a government running rough shod over investors is a great thing. Can we really believe that after spending $43bn that prices will be lower, innovation will flower, all the ISPs will still have their margins, Telstra shareholders will not be hit and the taxpayer will not be footing the bill. There is no fibre nirvana anywhere in the world. We are better off where we are with good ISP competition. The best thing would be if Optus would invest some money in its HFC network rather than bleating that its competitor should be broken up.
Cy Starkman
From the start
When the original plan to create Telstra out of Telecom and NDC was hatched there were two options. One is the way we have it, the other was to keep the infrastructure national which is being suggested now.
It was never going to work to give Telstra control over the national (tax payer funded) communications infrastructure. Obviously Telstra would serve itself.
Sol, deserves the flack he gets but lets not forget Ziggy before him who still prances around and yet did a fantastic job at creating the problem, slashing service, off shoring employment and hiking prices.
The advantage is unworkable, from whole pricing right through to technical service for external ISP client network failures in the exchange being delayed in preference of Telstra clients.
Tall poppies are different to oppressive poppies.
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