Editorial: Changing the game

Telstra and Nortel announcements will shake up the ICT industry

The ICT industry has wanted it for years, so it’s not surprising news of the Government’s proposed legislation to split Telstra’s retail and wholesale divisions once and for all was welcomed with (mostly) open arms (see page 1).

Under the telecommunications reforms, Telstra can either choose to split voluntarily and in conjunction with the Australian Competition and Consumer Commission (ACCC), or will be forced to handover its broadband cable and Foxtel assets and blocked from buying wireless assets. Alongside Telstra’s break-up, the telecommunications reforms also include new carrier licensing rules and more powers to industry groups around consumer safeguards. Check out our full report on page 12 for more.

Of the industry experts, analysts, ISPs and distributors ARN spoke to, it was clear most viewed the decision as a game-changer that would open up new market opportunities and level the playing field.

Given it has been 15 years since Telecom became Telstra, such an important decision had to be provoked by something enormous. Arguably, Telstra’s initial contempt of the National Broadband Network (NBN) and laughable Expressions of Interest submission to Government, which resulted in its omission from the tendering process, provided that catalyst and triggered last week’s reforms.

What’s obvious is that this country can’t afford to have two competitive national networks running alongside each other. The Government’s decision to form a separate, public company, the NBNco, to oversee the building project, was a big step towards ensuring everyone has equal wholesale access once the NBN was established.

Another way to avoid problems in the future is to ensure Telstra doesn’t set up against the NBN and other telcos with its competitive retail and wholesale arsenal. While I completely sympathise with ISPs that have battled against Telstra for years, and remember well the furore over the telco’s anti-competitive $29.95 broadband plan back in 2004, I do wonder if this decision comes too late.

Telstra, as a company and a culture, is well-entrenched. It’s going to take some seriously hard work – and no small amount of genius – to pull all that apart successfully without damaging the business for shareholders, or unsettling the market. Where do you even start? I think the Government is going to have to jump some significant hurdles before achieving its objective. Whatever happens, it’s going to transform the ICT industry.

While we’re on the subject of game-changing announcements, the question mark hanging over Nortel’s future was finally dispelled last week after Avaya was announced as the successful bidder for its enterprise business. Integrators on both the Avaya and Nortel sides of the fence were enthused by the news (see page 1).

I can imagine it’s been incredibly difficult for those trying to sell and support Nortel products this year. It’s great to see a resolution being reached which local channel partners believe they can work with.