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Friday, 20 April 2012 06:49

Telstra flags preference for Opposition FttN NBN plan

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Telstra CEO David Thodey has laid the dominant telco's political cards on the table and they appear to side with the LNP Coalition. After the Telstra investors meeting yesterday, Mr Thodey effectively told journalists that the Opposition's FttN would be faster and cheaper to deploy and a switch of governments would not financially disadvantage Telstra.

According to Mr Thodey, Telstra shareholders would not be disadvantaged by any switch of NBN policy by a change of government because the telco had locked in its $11 billion contract.

The Gillard Government has been issuing warnings about difficulties that would be faced in negotiations between a Coalition Government and Telstra but Mr Thodey effectively dismissed this by stating outright that it was financially protected under its contract and that switching governments would merely mean some fresh negotiations.

Mr Thodey reportedly also said that while the current $43 billion fibre to the home (FttH) plan, architected by the Rudd and Gillard governments was ideally the best solution for a super fast broadband network, the Coalition plan for a fibre to the node (FttN) network would be faster and cheaper to deploy.

Obviously, Mr Thodey chose his words carefully, as all skilled business leaders usually do, but the fact that the Opposition has seized upon them to score political points by claiming that it vindicates the LNP position, speaks for itself.

In addition, Mr Thodey raised the possibility of Telstra increasing its 50 per cent stake in Foxtel, should James Packer decide to sell the 25 per cent share owned by Australian Consolidated Media, something that may be problematical under the present government.

Prior to finalisation of its negotiations with the Rudd and Gillard Labor governments, Telstra was threatened with being forced to sell its stake in Foxtel if it did not agree to structurally separate.

Of course, there is no guarantee that either side of the political landscape would view an increase in Telstra's shareholding of Foxtel favourably. However, the Coalition is in a better position to score political points with the telco's long suffering shareholders by painting itself as a friend.

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Stan Beer

 

Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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