James Riley
Thursday, 15 October 2009 09:35
IT Policy -
Government Tech Policy
Page 1 of 2
Technology transformation issues would add massively to the cost of a functional separation of Telstra, and increase the risk of disruption to billing and service delivery to millions of customers, the company has told a Senate inquiry.
If Government were to force Telstra to functionally separate its
wholesale and retail arms, it would necessarily mean a double migration
of customers from Telstra legacy systems to functionally separated
legacy systems, group general manager for NBN Engagement
Geoff Booth told the committee investigating proposed legislative
changes.
"Indeed, if Telstra were then to buy from a national broadband network it would require a third set of IT changes," Booth said.
"So this multiple migration does significantly add to the risk of
customer service and billing programs with millions of customers
involved. It really magnifies the potential for some chaos."
The result Booth said would put a heavy strain on IT resource and drive significant costs .
"If Telstra is required to functionally separate along the lines of
British Telecom, for example, its human capital—its people—and its
system resources would be fully engaged in a significant IT
transformation to enable Telstra retail to buy from Telstra wholesale,
and the same resources would not be available simultaneously to develop
new systems to access fibre from NBN Co," he said.
In its submission to the Senate communications committee, Telstra has
put the cost of separating the company at about $1 billion, a large
part of which would be in making necessary changes to IT systems.
The Department of Broadband, Communications and the Digital Economy
told the committee yesterday it had not done its own analysis of costs
– saying the industry was better placed to provide those numbers.
However, the department's Networks Policy and Regulation Division,
first assistant secretary Pip Spence said based on its study of the BT
experience in UK and that of separation in New Zealand that "we have
taken that ($1 billion estimate) to be the outer envelope of what the
likely costs of functional separation would be."
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