Federal communications Minister Senator Richard Alston said a re-elected Coalition Government would proceed with the full privatisation of Telstra "as soon as possible".
But he qualified the fire sale by saying it would not go ahead until regional phone services had reached an adequate service level and standard.
The Federal Government currently owns 50.1 per cent of Telstra Corp Ltd, but if Labor wins Government it has promised to retain its share in the telco.
Speaking at the launch of an Australian national wholesale Internet protocol network developed by COMindico Australia Pty Ltd, Senator Alston also expects to have an update before the election on the digital upgrade of Telstra's Hybrid Fibre Coaxial (HFC) network.
Commenting on the forthcoming election and the future of the telco, IDC analyst Peter Hind said Telstra is extremely vulnerable to "half-brained, short-term, opportunistic, political decisions".
"You get the feeling that the amount of vision currently being displayed by Telstra's executives extends to the end of the next quarter. This should be the catalyst for action on the political front," Hind said.
"Unfortunately, intervention is not seen as politically correct and I worry that without action Telstra could eventually disappear under foreign ownership.
"If we lost control over communications, which is the mortar binding together IT infrastructure, we may as well forget notions of being a knowledge-based economy; we would condemn our descendants to a life of technological servitude."