Optus takes aim at Telstra's assets valuation claims
- 19 March, 2010 16:12
- Comments 19
Optus has condemned Telstra's statement to the Australian Stock Exchange (ASX) that the Government and NBN Co under value its assets.
Telstra issued a market update on its negotiations with the government and NBN Co over the national broadband network (NBN), stating it there was a significant gap between Telstra and NBN Co on what each party believed to be an acceptable financial outcomes.
But Optus director for government and corporate affairs, Maha Krishnapillai, has echoed comments made earlier today by the Competitive Carrier’s Coalition (CCC) that Telstra was effectively extorting the government. “Having held back the Australian telco industry for the past ten years, Telstra is now holding the Australian taxpayer to ransom by expecting them to fork out billions of dollars in compensation for an asset which is rapidly becoming redundant with the advent of fibre,” Krishnapillai said in a statement. The company said Telstra’s statement made it clear that the telco was nowhere near close to striking a deal with NBN Co, despite apparent assurances from Telstra to certain Senators that a deal was close. “Senators need to wise up to Telstra’s so-called ‘good faith negotiations’,” Krishnapillai said. “Telstra’s successful smokescreen has led to a delay in a vote for the much needed regulatory reform, providing Telstra with a more powerful negotiating position and leaving the rest of the industry, and the Australian consumer, high and dry."
Optus also reiterated that the company viewed regulatory reform – the break up of Telstra - as the essential foundation on which the industry, including the NBN, should be built. “The Senate should come alive to Telstra’s delay tactics and put national interests first,” Krishnapillai said. “Only then will Telstra start negotiating with NBN Co from a position that does not seek to rip-off taxpayers and kill-off competition.”
The CCC earlier called Telstra’s announcement “little more than an extortion note to the Government” which translated into a demand that taxpayers spend billions to bail the company out of the hole it has dug for itself.
“Telstra admits in its statement today that the competition and consumer protection reforms proposed by the Government are in the national interest. Yet it has done everything it can in the past five months to prevent those reforms passing Senate,” the CCC statement read.
“But one day after having succeeded in stopping these laws passing the Senate, Telstra now reveals that it wants a special payment from taxpayers to get out of the way of decent reforms.”
Telstra argues that it believes there to be a significant gap on what each party considered to be an acceptable financial outcome of the negotiations.
“There are also a range of commercial matters that are yet to be agreed,” the company’s ASX update reads. “In addition Telstra is discussion ways in which the gap can be bridged recognising the Government has highlighted the national interest benefits of the NBN platform of the telecommunications industry."
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Comments
Jokkey
The NBN should be financed with private money. The Feds are spending taxpayers money to invest in a network that will become a black hole. Telstra on the other hand is a propfitable telco that has shown continous profits and in a free market will be valued at much more than it is now. All the other telcos are hiding behind Conroy and his baseball bat waiting for the Scorpion king to start the big bash. Is this the beginning of the Stalinisation of the lucky country ?
RAYY
OPTUS IS AN OVERSEAS GOVT.OWNED CONGLOMERATE TRYING TO DESTROY AUST SHAREHOLDERS VALUE IN COHORTS WITH THE LABOR GOVT.
patch
Telstra just like any other corporation has the right and shareholders would argue the obligation to seek what it considers "fair value" for the assets NBN Co wishes to purchase as part of the NBN roll out. I do not see how this can be viewed as a special payment, if the Government wished to purchase my property to build a highway i have every right to seek adequate compensation.
In regards to Conroy and the current Labor Government you are doing a fantastic job of moving long term Labor voters offside as well as shareholders of one of Australia's leading companies.
Cameron
If Optus and the CCC really think anyone believes anything that comes out of there mouths they're kidding themselves. They're so badly governed by self interest to such a degree they should put "free advertisement" and "please destroy all my competition" before anything they say. They are a damn joke and anyone who believes them needs a wake up call!!
Michael
This is unbelieveable stuff. How on earth does Optus believe they have a right to comment on everything Telstra does or says? I don't see RIO is behaving the same way against BHP, or Wesfarmers doing similar things to Woolworths. Why is there so much sour grapes? It proves that Optus is not running an independent business but rather its profitability depends on the rent it can extract from Telstra by forcing Telstra to provide services for onselling to others at below cost values. This could be funny if it wasn't so much value destroying to Telstra.
James
Such ignorant comments, telstra is holding us back in terms of technology.
They stiffle competition with their vast infrastructure which they use to engage in monopolistic practices and have refused to upgrade for years whilst extracting exorbitant profits from the consumer.
A quick look at their internet plans vs what it costs them to deliver the service shows massive profit margins.
I kindly ask you all to compare our current infrastructure to japan, they have massive and unlimited fibre optic speeds and downloads for acceptable prices, yet telstra dares to think 2GB a month for $50 on adsl2+ is reasonable?
Telstra could dissapear tomorrow and nothing of value would be lost.
David
A good point was raised earlier, and should be explained to the Telstra shareholders, the value of Telstra is in fact decreasing due to lack of investment over a protracted period, they are inculded redundent tech and poorly maintained areas and claiming its all pristine and new.
They have flogged the cash cow to death, and now want top dollar for the rotting corpse, there you go, thats it in simple terms, now flog them shares darn quick, because the word 'liabilty' is going to banded around pretty soon, change is coming and I know it scares alot of folks, otherwise the National party wouldnt exist.
Shares are capitalism at work, where if a company under performs it gets removed out of the system, simple as that, no amount of bleating from shareholders will save it.
If a company lets say, ohh I dont know, hmm Telstra, had actualy plowed %X back into investment after seeing world wide trends in fibre optic this situation would not be occuring, you cant buck a world wide trend, plus not reinvest and not expect to get a beating at some point, but as I said, the cash cow was alive so they kept bleeding it.
You bought the shares, you should of kept abreast of trends within that market, you didnt, so now here you are all bent out of shape, the market is very unforgiving to the poorly informed.
Harquebus
Forget Telstra, build our own and never sell it. Go fibre to the node then wireless to the home, this will save heaps. Give affordable, unlimited and unshaped broadband to the people who are paying for it. Us.
If those idiots didn't privatize Telstra in the first place, the fiber roll out would already be well underway.
sams
Same bafoon on a soap box trumpeting his crap again, yet he cannot see that his ccompany (optus) is the kettle calling the pot black.
It took two years for Optus to sort out the backhaul issues on my exchange. Even now it is quite congested during peak traffic hours, but i digress.
Sure they are more cheaper (innovating?) than a Telstra provided port. But atleast i can say that i never had any major internet issues on a Telstra / wholesaled port, and that my major issues arrived when i swapped over to an optus (now wholesaled) port.
Sometimes you get hwat you pay for..
Seymour
With all sales of public assets to private entities, the asset is pillaged for all it is worth with minimal maintenance and re-investment so as to maximise profits. CEO's are obliged to put shareholders before public interest. The scenario is repeated no matter where in the world and no matter what the asset, be it power, water, telecomms, etc.
With Telstra it was worse. They didn't even buy the assets. They were gifted with billions of dollars worth of taxpayer's infrastructure that they milked for profit and degraded without making significant public interest infrastructure investment.
(Optus is tarred with the same brush, but missed out on the big gift.)
Public infrastructure must always be funded by and owned by the public. The NBN could be a good model, if government (present or future, of any flavour) doesn't ruin it.
hanse
Optus and the CCC have been sponging off Telstra for all these years, why don't they build their own network so the other Telcos's can sponge of them for a while ? Look at the high speed price the others charge when they can't piggyback on Telstra, http://apcmag.com/too-expensive-nbn-monthly-plans-unveiled.htm
no wonder the others want Telstra to carry most of the load.
Ronald E
Poor Optus, they can handle a minute island, but when it comes to a large landmass they just get lost.
Jeff Taylor
Optus are no better than Telstra, in fact probably alot worse. Where is your investment in the thousands of exchanges where you don't have a presence such as mine Optus? How about stop blaming Telstra for everything, get off your backsides do some serious investment yourselves! The old blame Telstra argument is starting to wear thin.
Marty
Telstra will be like the power companies blead it dry and then in years to comes want a 64% increase in calls to repair a 50 year old network
Telstra had there turn and and blew it give somebody else ago
Dargo
Optus should just keep their big mouths shut. They had a chance with Opel and blew it.
fred
I work in the telco industry. It's not mindless dribble that Telstra is holding us back. It's true. Everything from giving 5$ bonuses to techs for NIA (Not in Attendance) customers(shockingly this means that a lot of customers call their ISP angrily asking where the tech was, only to be told to their amazement that they weren't home), to making it hard for ADSL2 co-location, or running Telstra cable in the same streets as Optus in an attempt to bankrupt them in the early days, to simply not maintaining the copper network to a reasonable standard.
That all affects everyone. Sure, your phone line might be fine now, but if it isn't maintained, you'll join the endless lists of "Customer Network Improvement" victims. A CNI is a cynically named repair to bring something back to working condition. They usually take months, often years.
They can do this because they ARE the monopoly copper phone line owner.
Every single copper phone line and the ducts they travel in belongs entirely to Telstra. Every single land line and ADSL customer in this country pays tribute to Telstra.
Optus may be no better.
I doubt they'd do any better than Telstra honestly, but their point is valid. Every employee of another Telco or ISP in the country knows this.
Ignore the messenger. They ironically have a lot to lose from the NBN too when companies like Google step up to the plate with corporate VoIP offerings.
Their message is still valid though. Telstra ARE actively preventing progress.
Chris
Optus and it's management team and Singapore owners should just stop complaining about Telstra and just get on with running there own business....
We have had to listen to Optus go on about it not being fair for the last 18 years.... Shut up and get on my running your own business...
Time for a changing of the guard at Optus......
JT
Of course Optus want to devalue Telstra - it plays into their hands (or pockets for their profit). In the mean time the mum and dad investors in Telstra are getting a bum deal with this labour government.
How many SGT shares does Mr. Conroy hold I wonder? We all know the future fund dumped their TLS shares before this announcement was made, yet there has been no investigation into insider trading. I wonder why not?
Raymond
@ 15 By all means kick Optus, but kick them for the right reasons ! they did not blow Opel, they never had a chance to! this present government/Conroy cancelled Opel, if it had of gone ahead the regionals and bush woul have had broadband by now!
So kick Optus for their crap customer service, have people in Manila and Mumbai not understand one word you are saying and hang up on you!
But not for Opel!
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