Ziggy plays the KAZoo

Whatever your opinion about the full sale of Telstra, the fact is that right now, we the people still own 51 percent. Unfortunately we own it in name only and we have to rely on the federal government to be our responsible proxy on the board.

I for one would like to tell my proxy to vote down the current Telstra shopping spree until they get the damn network going properly. Not content with splurging on the Trading Post newspaper group, which I am sure is a good investment, not least because it contains thousands of telephone numbers begging to be called, Telstra is now off hunting for a services and outsourcing group.

KAZ is the current target of Telstra’s intentions, and I don’t wish the shareholders of KAZ to miss out on a juicy bonus, but what on earth does Telstra think it is doing? Does the telco really think it needs to get bigger to get better? And since it is now buying into industries that are not directly related to providing telecommunications services, does the Telstra board know something that we don’t?

Is the telco sector stuffed? Is there no more money to be made out of phone and data travelling across the country? Judging by the mega-profits Telstra keeps making, you’d hardly think the arse had dropped out of the phone call market just yet. So why is Telstra chasing off into other markets while its “core” market is still pathetically under-serviced?

Apart from the fact that hardly anybody in rural and regional Australia gets anything like the service they expect from the carrier, there are thousands of suburban customers being denied broadband due to the short-sighted “she’ll be right” approach to network building that Telstra has been using for the past 10 years. The fact that the best connection I can get is ISDN hasn’t jaded my view in the slightest. Well, not much. Oh alright, a little.

But Telstra has already created a virtual workforce out of its long-suffering technical field service staff by firstly moving them to a new company, no longer directly part of Telstra, and then shifting them onto contract once they were safely out of reach of any marauding trade unions. If that is Telstra’s model of a service business, why is it going out and buying another one? Surely all it needs to do is hire a few experts and sign up a swag of contract service providers. That’s good enough for servicing the telco’s network, but obviously not good enough for enterprise customers.

Perhaps the real reason is that Telstra has learned a few things about outsourcing, having signed quite a few deals as a partner with IBM GSA, and a swag more deals to get its own IT needs outsourced. During that process the Telstra board must have started to notice the massive profits available in the outsourcing market, particularly when your major shareholder has been mandating outsourcing as a way of forcing IT workers onto contracts and out of the clutches of protective unions.

Is there any sense of a conflict of interest here? The majority shareholder will soon be in control of one of the larger outsourcers, while at the same time being a major consumer of outsourced services across the whole of government. How long before we get claims of inside knowledge and their attendant lawsuits coming at Telstra from other players who get pipped by the telco in the bidding wars for the government outsourcing dollars?

Or perhaps this is just another lame attempt to get full privatisation past a recalcitrant Senate. By claiming that Telstra isn’t just a phone company looking after the connection to Dad and Dave’s farm, but rather a multi-faceted service business with a bit of publishing and telephony on the side, just maybe the independent Senators can be convinced to vote for selling what’s left.

No wonder Darryl Williams has announced his retirement. Quit now Darryl, before the parliamentary committees start asking the curly questions.

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