Optus' NBN deal gives it an unfair advantage

Renai LeMay
Friday, 01 July 2011 14:22

IT Policy - Government Tech Policy

opinion In February this year, Optus regulatory chief Maha Krisnapillai left journalists in no doubt as to how the SingTel subsidiary felt about Telstra's $11 billion deal with the National Broadband Network Company and the Federal Government remaining private and confidential.

'It is imperative that we have full transparency of the agreements to ensure that no compromises are made that will provide Telstra with an unfair market advantage,' he said at Optus' regular financial results briefing session.

It's a refrain that long-running Optus chief executive Paul O'Sullivan would repeat later in the month, during a high-profile appearance at the MediaConnect conference in Queensland. 'Sure, Telstra shareholders should get to see and sign off on the deal, but so should all Australians,' the executive told his audience.

Other aspects of Telstra's deal with the Government have also given its baby brother pause. Over the past six months and previously, O'Sullivan has expressed his fear that Telstra would take the Government's billions and use them to engage in a war on its competitors that would result in the telco taking the bulk of the market share to be gained from the NBN turmoil through sheer force of dollars being spent to win it.

O'Sullivan has referred to this effect as 'market distortion', and highlighted Telstra's significant marketing push in the mobile sector in the second half of 2010 as a small example of what could happen as the NBN is rolled out '” but on a much grander scale, with many more billions for the telco to play with.