Government and Telstra trade fresh blows over NBNco
- 03 March, 2010 09:22
- Comments 6
The Government has traded fresh blows with Telstra over its attempt to structurally separate the telco using legislation.
In a letter to shareholders, Telstra said it supported the Government’s NBN as well as ongoing negotiation.
“However, these commercial discussions cannot be divorced from the current legislative risks your company faces,” the letter said. “We have always said this legislation is likely to destroy shareholder value and makes an agreement with NBNco and the Government harder to achieve.
On February 24, the Government also released draft legislation that would govern how NBNco is operated and regulated. Although this is only draft legislation, it raises for the first time the prospect of NBNco becoming a Government-funded retailer, not just a wholesale network provider, the letter said.
“If enacted, we would need to factor this into the financial consideration required to achieve an agreement that is in the company’s and your best interests,” the letter said.
In a press conference to launch the first trial NBN sites on mainland Australia, Communications Minister, Senator Stephen Conroy, fought back by insisting NBNco legislation was still in draft mode and rejecting the notion he was responsible for any drop in share value.
“That might be true if the share price hadn’t fallen below $3 before I issued the legislation,” he said. “I’m not sure if they thought shareholders had forward knowledge, but I don’t think they did.”
A draft piece of legislation was released for industry comment last week.
“We’ll see what the comments are, address them and make a final decision,” he said.
On the issue of negotiations with Telstra, Conroy was positive and insisted neither group was playing games or using delay tactics.
“We continue to be engaged in positive and constructive dialog. We said we weren’t going to comment on ongoing individual daily negotiations and we’re not going to start today,” Conroy said. “These negotiations are complex and there’s never more than two or three days without some sort of ongoing dialog towards trying to solve some outstanding issues.”
The Minister was more open on the issue of the Coalition, accusing them of delaying the Telstra bill over politics.
“We’ve got a whole range of Senate debates over existing bills and we’re making no progress because the Liberals, Greens and everyone else are hijacking the Senate,” he said. “If you look at the bills that have passed in the last six months, there’s almost none.”
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Comments
Paul
I detest Telstra as much as the next person, but for, I think the first time ever, I support them.
The NBN should be wholesale ONLY and the government should stay out of the retail sector.
They can buy their broadband just like everybody else!
Jimmy
(1) Separate Telstra.
(2) Government purchases Copper, Fibre, Ducting and Exchanges.
(3) Government creates NBNco.
(4) Build national Fibre to the Home network.
(5) Win WIn for both Customers and Businesses with an open playing field.
Bruce
Conroy and mates are responsible for destruction of Telstra share holders retirement funds and should be held to account next election.
Jason
Only the stupid purchased Telstra Shares.
But I wonder how many purchased Pipenetwork Shares? None.
Stupidity comes from those who do not understand the interweb.
Iceyone
Bruce the only people who should be held to account for the underperforming company called Telstra are the executives themselves.
Gone are the day when Telstra can bully anyone and everyone into submission. People should have realised before buying these shares that they would one day have to structually seperate.
It was in the prospectus of T1 for crying out loud!
Cameron
I dont see how Telstra share prices were EVER going to go up in an open industry. They had no place to go from complete monopoly but down (ie. Lose market share). Therefore their share price will go down. They had a few people up top make some monumentally stupid decisions which didnt help as well. And now its all the governments fault that their share price is crap compared to what it was when they first sold it?
As to shareholders retirements funds:- its the share market, its naturally unstable, nothing is a guarantee, "money" can disappear overnight.
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