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"Nothing is inevitable but it's desirable. We're now in a different market and I think Telstra can put forward a pretty strong argument that they're no longer a government owned organisation. They're much more looking after the shareholder's interests but corporate Australia isn't getting the right sort of deal and the right opportunity to see innovation in action.
"This isn't about anything other than a separation debate which from a retail point of view gives other people the same access to the assets that have been invested in over many years.
"It means I can't call up my mate in the wholesale division to get things that aren't available to my competitors."
While Varney has some pretty strong pro-separation views, he is also adamant that it can and will have to be worked out to be in the best interests of Telstra shareholders.
"It is no one's interests for there to be a duplication of infrastructure but there has got to be a fair return for Telstra shareholders," he says.
However, Telstra wholesale margins, while healthy, would have to be regulated.
"Regulation will be necessary because otherwise there will be price creep," he says.
Meanwhile, according to Varney, Telstra is missing out on nothing by not being part of the NBN process.
"I don't think the NBN will go ahead," Varney says.
"Telstra can already provide just about everything that the NBN proposes to do."
