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UPDATE 2: Telstra will change for OzEmail

UPDATE 2: Telstra will change for OzEmail

Telstra is willing to make changes to its bid for OzEmail in order for the acquisition to get the all clear from the Australian Competition and Consumer Commission.

However, if the acquisition is rejected, it will not be a major set back for the telco, John Rolland, Telstra's director of online services said.

"In our internet plans there's number of prongs - access, content, portal, e-commerce, and of course we have aspirations outside of Australia. It wouldn't be a major set back," he said.

"We've made it very clear we would like to discuss ways to get the deal through. We're willing to listen," he said.

The ACCC has "significant concerns" about the $300 million acquisition, which would see the number one Internet service provider, Telstra Big Pond merge with the second largest.

In a preliminary statement, the consumer watchdog said it has concerns that the acquisition will "lessen competition."

In the short time the Commission has had to consider the acquisition, it cannot yet agree to the merger, Professor Allan Fels, ACCC Chairman said.

"It is possible that the proposed acquisition could have a detrimental impact on the competitive dynamics for Australian online content, online advertising and electronic commerce," Fels said.

"The Internet markets are still in the early stages of development in this country, The emergence of a dominant Australian ISP could retard competition and stifle innovation in these evolving markets."

According to mergers Commissioner, Ross Jones, the ACCC had been working towards a January 28 deadline following a request from Telstra for a preliminary notice.

Yet, the telco itself, only issued its written submission to the Commission last Thursday afternoon.

"I was most hesitant to release a preliminary notice before a submission from [Telstra was received]", Jones said.

"I am most puzzled by the fact it came in late yesterday."

According to Rolland, Telstra informed the ACCC when it would be making its submission.

"We didn't consider it late. We verbally told them they could have as much time as they needed," he said.

Rolland said unlike other submission received by the ACCC, Telstra' submission contains "a lot of fact not rhetoric.

"If you look at what's been pumped out by competitors, it's rhetoric and misrepresentation around market share, online advertising content and e-commerce. We think we've addressed those issue in our submissions," he said.

According to Jones, three teams from the ACCC will continue to examine the acquisition over the next few weeks.

It is expected further meetings will be held with Telstra and other interested parties as more information comes to light.


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