Telcos unperturbed on Telstra split

Telecommunications experts say Telstra will pose no threat to the National Broadband Network (NBN) if it is structurally separated.

Their comments follow reports in The Australian that Communications Minister Stephen Conroy will offer Telstra a 49 percent stake in the NBN if it is split into separate wholesale and retail arms, and 20 percent if it sells its fibre infrastructure to the government and functionally separates.

Speaking at the Cebit Access conference today, iiNet managing director Michael Malone, a critic of Telstra’s wholesale provisioning and competitive strategies, said Telstra could “run the NBN” if its business is carved up.

“I’ll say something controversial but I couldn’t care less if Telstra owned 100 percent [of the NBN], as long as it is fully separated or the equivalent, and policy frameworks are right,” Malone said.

While most agreed that Telstra should be structurally split, Competitive Carriers Coalition director Dave Foreman said the NBN share offer was redundant because Telstra would be a completely different entity to the present company.

“I don’t see what it means since the split Telstra won’t be Telstra as we know it,” Foreman said. “It wouldn’t matter how much it owned.”

Malone poured cold water on rumours the $43 billion NBN was a conspiracy to split Telstra and use the entity to build the original $4.7 billion Fibre-to-the-Node network. He said the $4.7 billion plan “looked and smelled bad” but said Conroy, following a recent meeting, is “genuinely committed” to completing the NBN.

“We spend billions in health and don’t expect a commercial return, so why should this be different? The $43 billion cannot be recovered from customers, but the new NBN is built on the right technology that will last two generations and not suffer from congestion, latency and saturation,” he said.

“The coalition would look foolish to try and stop it… by hook or crook the network will be built.”

Malone said the government’s $250 million rolling investment in regional backhaul was essential to break what he says is an investment black hole caused by a lack of competition.

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