Telstra CDMA junking plan outrageous: tier 2 carriers

Stan Beer
Thursday, 17 November 2005 10:00

IT Industry - Strategy

The Competitive Carriers' Coalition (CCC) stepped up its war on Telstra's bid to retain its monopoly, slamming its plans to junk its investment in the CDMA network rather than sell it to a competitor.

In a statement, the CCC said the Telstra city network upgrade is contingent on an outrageous bid to outlaw competition on its fixed line network and questioned Telstra's motives for junking the CDMA network.

'Telstra's regional customers must be wondering why the company has been constantly spruiking CDMA only to now tell them it is being ripped out,' CCC executive director David Forman said.

'Telstra shareholders must be wondering why the company is trashing equipment so recently bought, rather than trying to recover some sort of return on it by selling what appears to be a perfectly acceptable network.

'And taxpayers should be asking why Telstra has been using their money to subsidise rolling out a network that is now being junked.'

According to the CCC, taxpayers have spent well over $90 million providing subsidies to extend the coverage of mobile networks, most of which had gone to Telstra. The networks it has built with that money are now to be scrapped because Telstra says it has made bad technology choices, says the CCC.

'The reason Telstra will scrap rather than sell the network is, of course, that it will do anything to keep competitors out of the bush,' Foreman said.

After saying that previous management had failed to invest in the fixed line network, Telstra claims it now has to play catch-up, but is demanding special legal protection to lock competitors out of its continuing monopoly over the last mile.

'Telstra was right to place a regulatory caveat on its ability to implement the plans it announced yesterday. The plan requires a Government and regulator willing to endorse a business plan that looks like the last vestige of Soviet-era industrial organisation - one giant monopolist and no choice for consumers,' Forman said.