Telstra break-up will be pain for telco and gain for consumers

Stephen Conroy’s radical reshaping of the telecommunications industry will not change the way Australians use their mobiles, surf the internet or watch pay-TV, reports The Australian.But it will almost certainly change the companies they deal with and, if successful, lead to lower costs for consumers.And it will underpin the financial case for the government’s ambitious national broadband network, with its promise of world-class internet download speeds for most Australians.To read this report in The Australian in full, see:
http://www.theaustralian.news.com.au/story/0,25197,26080215-5013404,00.htmlAlso see:Stephen Conroy rings in a new era for telcos
The Rudd government has given Telstra an ultimatum to split its wholesale and retail businesses or it will be forced to sell key assets and locked out of new broadband and mobile phone opportunities, in the biggest shake-up of the communications sector in a generation.Communications Minister Stephen Conroy made the dramatic announcement yesterday, declaring the government wanted to inject competition into the market for telephone and broadband services as it prepares to roll out its $43 billion national broadband network.
http://www.theaustralian.news.com.au/story/0,25197,26080618-601,00.htmlTelstra may benefit from Stephen Conroy’s separation plan: comment by John Durie
The morning after the Conroy bombshell has revealed that life will not nearly be as bad as the doomsayers had predicted.In fact, while no company likes its options limited by government, it may even be positive for Telstra.The options left all have their negatives but also have balancing positives.
http://www.theaustralian.news.com.au/business/story/0,28124,26081480-5013408,00.htmlGovernment makes the right call on telco split: comment by Michelle Grattan
The Federal Government is strong-arming Telstra into separating out its network and retail business, and Telstra is predictably squealing. But it’s a mutually beneficial play, given Telstra’s very limited options, and it should lead to more transparency and lower prices for consumers.Ever since the Government in April announced its ambitious, $43 billion, go-it-alone broadband project – after Telstra declined to be part of the tender on the required terms – it seemed only a matter of time until the company would have to co-operate.
http://www.theage.com.au/opinion/politics/government-makes-the-right-call-on-telco-split-20090915-fpok.htmlUltimatum to Telstra carries $10m fines
Telstra will face fines of $10 million if it fails to comply with tougher mandatory consumer protection standards under the Federal Government’s proposed restructure.In an ultimatum delivered to Telstra, it must find a way to split its wholesale and retail operations to the satisfaction of the competition watchdog or miss out on acquiring future crucial additional wireless spectrum.
http://www.theage.com.au/business/ultimatum-to-telstra-carries-10m-fines-20090915-fpq3.htmlTelstra has to separate or lose out, analysts say
Telstra could be deprived of a large revenue stream from mobile phones and broadband if it refuses to bow to the strongest form of separation proposed by the Federal Government.Telstra shares fell 14c to $3.11 in the wake of the Government’s demand that the telco giant structurally separate if it wants to participate in the spectrum auction and keep its Foxtel stake and high-speed cable network.
http://www.smh.com.au/business/telstra-has-to-separate-or-lose-out-analysts-say-20090915-fpqz.html
http://www.theage.com.au/business/telstras-separation-anxiety-20090915-fppo.htmlNBN process already taking shape
The Rudd government may be forcing the break-up of Telstra to help realise its national broadband network dream, but the first NBN rollout is already under way, bypassing Telstra.In Tasmania, chosen for the initial NBN rollout, teams of contractors are constructing the “backbone” of the fibre optic network that will result in three regional towns being connected by July next year.
http://www.theaustralian.news.com.au/story/0,25197,26080079-5013404,00.htmlGround broken for network
In A paddock between an oyster lease and Hobart Airport, the first cable trench of the national broadband network was dug yesterday.The small excavator and work crew at the sharp end of Australia’s digital revolution were laying ”backbone” cable to Midway Point, a small waterside suburb that is one of three Tasmanian pilot communities for the entire country.
http://www.smh.com.au/technology/ground-broken-for-network-20090915-fppc.htmlTelstra toyed with the big split
The Telstra reform package outlined yesterday not only rates as the most serious and beneficial micro-economic reform of the present government, but better still, it simply suggests a plan the company itself has long considered.Forget all the public noise of recent years. Back in 2005, in the dying days of Bob Mansfield’s reign as Telstra chair and before his ill-fated flirt with media ownership, the company was privately working on Project Millennium, which was to split the company structurally.
http://www.theaustralian.news.com.au/business/story/0,28124,26078968-5013408,00.htmlWipe-out: $2b lost on threats to Telstra
The days of Telstra’s stranglehold on the telecommunications market are numbered after the Rudd Government announced a dramatic shake-up that wiped nearly $2 billion off the value of the company’s shares yesterday.In a high-stakes battle intended to shoehorn Telstra into the $43 billion national broadband network, the Government laid out its plan to split the company’s retail and wholesale arms.
http://www.smh.com.au/business/wipeout-2b-lost-on-threats-to-telstra-20090915-fpqt.htmlTelstra gets plenty of stick but no carrot: Comment
The Rudd Government yesterday brought out that big stick again – the one it uses to make sure that Telstra remembers that when it comes to negotiating, the Government has the ultimate control.Telstra keeps telling the market that there is plenty of good feeling and commonality of view between itself and the Government, but all that was in evidence yesterday was plenty of stick and no carrot.
http://www.smh.com.au/business/telstra-gets-plenty-of-stick-but-no-carrot-20090915-fpr2.htmlThe game’s up for the old Telstra
The Rudd Government has moved to break Telstra’s stranglehold on Australian telecommunications, announcing a forced restructure that prompted investors to strip nearly $2 billion in value from the company’s shares yesterday.In a high-stakes move to boost competition and shoehorn Telstra into the $43 billion national broadband network, the Government has laid out a plan to separate the retail and wholesale divisions of the company.
http://www.theage.com.au/business/the-games-up-for-the-old-telstra-20090915-fpo4.htmlConroy draws the line at Telstra’s monopoly
Telstra will face fines of $10 million if it fails to comply with tougher mandatory consumer protection standards under the Federal Government’s proposal to restructure it.In an ultimatum delivered to Telstra, it must find a way to split its wholesale/retail operations to the satisfaction of the competition watchdog or miss out on acquiring future crucial additional wireless spectrum.
http://www.smh.com.au/business/conroy-draws-the-line-at-telstras-monopoly-20090915-fpqu.htmlTelco’s break-up good for consumers, bad for shareholders
The Government’s decision to split Telstra may prove a boon to consumers but has incensed shareholders of the telecommunications company who had no inkling their investment would be cut in two when they acquired shares at privatisation.The sharemarket pronounced its early verdict on the plan for ”structural separation” of the telco yesterday, driving down its share price by 14¢, or 4.3 per cent, to $3.11 a share. Until now, Telstra has been able to use its market muscle to charge competitors for access to its cable networks.
http://www.theage.com.au/business/telcos-breakup-good-for-consumers-bad-for-shareholders-20090915-fppp.html

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