Optus takes aim at Telstra's assets valuation claims

Joins CCC in condemening the telco's argument that its assets are not being correctly valued

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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