Home Industry Strategy Welcome mat out for NBN from Telstra and CCC


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Telstra and its old adversary, the Competitive Carriers’ Coalition have both ‘welcomed’ the government’s decision on the national broadband network (NBN) – but, it’s probably just the start of the next round of sniping between these two muscled up fighters.

In one corner, Telstra says it’s immediately reviewing the government’s proposal to build the network in a partnership with the private sector and looks forward to “constructive discussions” with the government at the earliest opportunity.

And, Telstra chairman, Donald McGauchie, says “Telstra has publicly advanced the need for high-speed broadband for a number of years” and, just in case you reckon structural separation might be on the government’s mind with this decision, McGauchie reminds us that “Senator Conroy has said today that the Government does not have a pre-determined view on regulatory matters.”

Meanwhile, the Competitive Carriers’ Coalition - harsh critics of Telstra and pretty much everything it does in business - enthusiastically welcomes the “historic economic reform”,  but takes the opportunity to again side-swipe Telstra, commenting that “the reforms are long overdue, as evidenced by the internationally high prices and poor services Australians have suffered for more than a decade.”

The CCC’s executive director, David Forman, says the government’s decision has the potential to turbo-charge competition in Australian communications and leap-frog Australia to the forefront of broadband technology in the world, adding that consumers and businesses across the country should see “significant and rapid improvements in prices and services for communications services.”

According to Forman, “where ever competitors have been able to gain a foothold in Australia, prices and services have immediately been transformed and consumers have been the winners.”

But, Forman is quick to remind us that “competition in the Australian market has been slowly suffocated during the past five years, while other countries have leapt ahead. The regulatory reform agenda, with legislation this year, can reverse that trend.”

Ah yes, it’s good to see the old rivalry alive and well – after all, it’s good for competition!

Telstra not only welcomes the NBN decision but chairman McGauchie says it also welcomes the “opportunity to provide input on the regulatory reform discussion paper.”

He’s quick to point out that “Telstra has publicly advanced the need for high-speed broadband for a number of years and shares the Government’s strong desire to make high-speed broadband widely available to all Australians as a key enabler of economic growth and social development.”

McGauchie also says Telstra supports the Government’s objectives of investment in world-leading broadband infrastructure, an innovative telecommunications sector and healthy competition that provides “real choice for customers.”

Pledging that Telstra will work with the Government to assist with the implementation of its strategy, McGauchie says, however, that the company will remain at all times “committed to ensuring the best interests of our shareholders, employees and customers,” and that the new NBN will have “little short- to medium-term financial impact on Telstra’s business as it would take at least eight years before it is completed.”

What’s more, McGauchie says the NBN announcement does not change Telstra’s forecasts or its guidance for financial years 2008-2009 or 2009-2010.”

Well, it might not change Telstra’s forecasts for the next few financial years, but David Foreman at the CCC says the NBN reforms will certainly change the costs to consumers with a significant effect on prices.

“Once implemented, if the result of the market reforms announced today does nothing more than bring Australian prices into line with OECD averages, the result will be dramatic,” Foreman predicts.

“For example, small and medium sized businesses could expect price cuts of 40 percent.”

Foreman reminds us that “Australian communications competitors and consumer representatives have called for reforms to create a competitive level playing field for 15 years, and these changes have the potential to do that.”

According to Foreman, overseas experience shows that it can be confidently predicted that competitors will “respond immediately even if the start date for some aspects of the reform package are ahead of us.”

Foreman congratulates Minister Conroy and the Government on making such a “far sighted decision on industry reform in a way that no Government had previously been willing to do.”

I suspect it won’t be long before the next installment in the NBN wars with some spice added to the mix of public debate by both of these old warhorses. Stay tuned to iTWire!


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