Telstra separation anxiety: Tech costs and chaos

James Riley
Thursday, 15 October 2009 08:35

IT Policy - Government Tech Policy

Telstra regulatory affairs chief Tony Warren said the estimates from the UK did not include the transformation costs.

"The real cost of the BT model is in chopping up the systems," Dr Warren told the committee. "As you know in telcos once you start touching the operational systems or the business support systems, the numbers add up."

"BT were required essentially to chop up and duplicate their operating support system. That cost literally hundreds of millions of pounds and has really driven costs through the roof. That shows up in their IT transformation numbers in their accounts."

Dr Warren said the $1 billion estimate contained in its submission was "a serious estimate having spoken at length with both BT, Telecom New Zealand and to some extent Telecom Italia."

"We are very comfortable that we know where those costs will be driven and if BT style functional separation is imposed upon us, we think those numbers are very close to what will come out. They are our best estimate at the moment."

Meanwhile, Opposition communications spokesman Nick Minchin has again called for a delay debate on the telecommunications reform legislation until after Government had completed its discussion with Telstra.

He accused Communications Minister Stephen Conory of rushing the legislation through, and Government of "abusing its power to force Telstra to prop up its dodgy $43 billion NBN."

"The Government's NBN implementation study is expected to be completed in February and as a result it makes no sense to ram through this legislation, before the Government even knows what the future telecommunications landscape may even look like," Senator Minchin said.

"The Coalition is certainly not opposed to sensible telco regulatory reform and consumer safeguards."

"However, moves by any Government that threaten to break-up a major publicly listed Australian company and which could ultimately have a detrimental impact on consumers, particularly if the NBN does not materialise, need to be exposed to rigorous cross examination," he said.