Analyst: Telstra will exploit Tribunal ruling

Analyst: Telstra will exploit Tribunal ruling

A leading telco analyst claims Telstra will spin its loss to impress shareholders

Telstra will try to spin its way out of negative publicity to appease shareholders after an appeal to force Optus out of its copper network failed, according to a leading telco analyst.

The Australian Competition Tribunal this week threw out the incumbent telco’s plan to block Optus from accessing its last mile copper lines where Optus owns Hybrid Fibre Coaxial (HFC) cable networks.

In December last year, Telstra appealed to the Tribunal after its Optus HFC exemption application, which argued the segregation would drive competition, was rejected by the Australian Competition and Consumer Commission (ACCC).

According to a statement released by the ACCC, which embraced the verdict, the Tribunal did not accept Telstra’s justification and claimed such a discriminatory access policy would “be likely to seriously hamper the achievement of long-term dynamic efficiency and sustainable full facilities-based competition”.

The Tribunal further elaborated on the specifically targeted nature of the application and said if granted, the competitor would be “at a significant competitive disadvantage”.

Layer 10 founder and telco analyst, Paul Brooks, said while this outcome was water off a ducks back for Telstra, the company’s tenacity in court appeals could be attributed to impressing shareholders.

“The company feels it has a corporate duty to fight any adverse decisions laid upon them,” he said. “It wants to bolster shareholder confidence by remaining consistent with its history of fighting. If Telstra just accepts unfavourable decisions, they might be perceived as weakening.”

Brooks highlighted Telstra’s court track record, including a case involving misuse of Optus confidential information, and said the company would probably exploit public ignorance of internal telco affairs to turn the situation in its favour through mainstream outlets.

“People without specialist insider knowledge of the telco environment don’t really understand what happens behind the scenes with wholesale customers,” he said. “Based on what the company has done in the past, it will probably try to put a spin on this ruling through public advocacy on its website, communication with shareholders and advertisements in the paper.

“It wants people to think all other service providers are freeloaders and the industry would be better if they each invest in their own ubiquitous networks.”

Brooks rebuked Telstra’s continued stance in pushing for individual service infrastructures because most service providers did not have the same resources as the incumbent telco.

“It is also inefficient to have organisations splurge on duplicating networks when it could be done once and shared equitably so that the company taking the risk in building the infrastructure can get a good return,” he said.

Telstra did not respond to repeated requests for comment by the time of publication.

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Tags Telstraoptuspaul brookslayer 10


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