Telstra's rural presence plan: it's all about futureproofing

By Stuart Corner
Monday, 12 January 2009 12:50

Opinion and Analysis

Telstra has been railing against the 'unnecessary' burden of being required to produce and follow a regional and rural presence plan, but there were good reasons for its imposition and no evidence yet that those reasons are not still valid.

Telstra is required as part of its carrier licence condition to "maintain a local presence in regional, rural and remote Australia, to the extent that this: is broadly compatible with [its] overall commercial interests; and is not unduly prescriptive and does not impose undue financial and administrative burdens on [Telstra]."

It is also required to give the minister "a draft local presence plan setting out the range of activities and strategies [Telstra] deploys or will deploy in regional, rural and remote Australia," in order to meet this requirement.

The original plan, produced in 2006 expires in June 2009 and Telstra, as required, has produced an update, with Countrywide group managing director, Geoff Booth, complaining that, "Such a Plan is not required of any of other 260 licensed carriers currently operating in Australia and is just one example of the unnecessary and costly regulation imposed solely on Telstra and not other telecommunications providers."

He claims that; "Telstra continues to value customers in rural, regional and remote Australia in their own right without the need for a Rural and Regional Presence Plan....[and] If we want to increase sales and retain customers in a highly competitive market, we have to constantly improve the value we offer to customers."

Yes, but the market in many areas of regional and rural Australia is anything but competitive. There are nowhere near 260  'real carriers' and of those, many never go within cooee of rural Australia. Next G is a great achievement but until Optus and Vodafone complete there promised expansions, in many remote areas it's Next G or No G.

So Booth is being rather disingenuous trying to make a case for strong competition in rural Australia. To understand the rationale behind this 'unnecessary' burden on Telstra it's necessary to go back a few years, to when the Howard Government was gearing up to complete the privatisation of Telstra with T3.

The fear expressed by many, electorally significant, members of the rural and remote community was that, absent direct government control and significant competition, Telstra would direct resources away from regional and remote Australia to fight for business in the more lucrative metro areas where competition would be fiercest.
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