Monday, 13 October 2014 06:01

Telstra cries poor – NBN is hurting us! Featured


OPINION. It is almost impossible to believe. Telstra, the former government monopoly that has squeezed billions out of the NBN, with many more billions to come, is now complaining that it will have to raise prices – because of competition from the NBN.

Nothing surprises in the modern world, but the sound of Telstra complaining about competition from the NBN is one thing I thought I would never hear.

There is a lovely Yiddish word – ‘chutzpah’. The Americans use it much more than we do. Audacity, nerve, the brazen gall to ask for more when you already have more than enough. Telstra has chutzpah.

Telstra has asked the Australian Competition and Consumer Commission (ACCC) to let it raise its prices because – wait for it – “the transition to the NBN will ­significantly accelerate the decline in demand for fixed-line network services and impact on the costs of operating our network.”

Well, yes. It’s called technological evolution, a little known phenomenon that has made Telstra one of Australia’s largest and more profitable companies. It has led to the rise of fast broadband and the NBN, which will use much of Telstra’s infrastructure – for which Telstra will be compensated to the tune of $11.2 billion.

And new, with the introduction of Malcolm Turnbull’s dreaded ‘multi technology mix’ – his term for the hodgepodge of fibre, copper, HFC and wireless the NBN is becoming – Telstra is set to make even more. That’s if its negotiations with the Government, which Turnbull optimistically forecast earlier this year would be completed by June, ever end.

Telstra delayed Labor’s FTTP NBN by screwing the Government for every penny it could. You can do that when you’re a monopolist. Now it is doing the same to the Coalition. And, with utter shamelessness – with breathtaking chutzpah – it is now saying that because of the decline of fixed line voice telephony it deserves even more.

That would come from you and me, in the form of higher prices for all landline services and all the services that come on top of that. The price rises would ripple through the economy.

Telstra’s demands have been reported by Fairfax Media, which seems to have been leaked a letter from Telstra to the ACCC. “We expect demand for fixed-line services will fall by as much as 60% over the next five years.

“Over this same period we will reduce our costs significantly, although not to the same extent, given the fixed nature of many of our costs.” The company expects costs to fall by 30% to 35% over the same period.”

Therefore, according to Telstra’s logic, it should be compensated. Has it no shame?


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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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