Telstra: all cashed up and nowhere to go

In the blaze of criticism surrounding Telstra’s ambition to become a media player, those accusing our hamstrung national carrier of losing the plot have managed to avoid a key question: what precisely is Telstra meant to do when its telephony revenues dry up?

There is no doubt that the core of Telstra’s telephony revenues are gradually being eroded by both other carriers and technologies such as VoIP. Fueled by an oversupply of capacity, tarrifs will continue to drop at the same time as enterprises explore new ways to avoid them altogether. But unlike its competitors, Telstra must provide loss-making services to parts of the community that would otherwise be left unconnected. You don’t see other telcos thumping at the door of government to supply services to regional and remote Australia. They know well it is a fruitless pursuit, and are happy to see a competitor bogged down by social obligation and bad publicity.

Yet every time Telstra tries to invest in new ventures, it gets hammered from all sides. It's hardly surprising Australia’s two largest media empires - PBL and News Ltd - cried foul over Telstra’s $1.2 billion cash-cow Sensis sniffing at Fairfax.

Forget any mock philosophical outrage shown by News and PBL over Sensis’ lust for Fairfax, it’s the threat of Australia’s two most successful classified advertising companies joining forces that really horrifies Rupert and Kerry. No wonder Sensis bought the Trading Post.

What is lost in all this fuss is that Australia now has a national communications policy failure when it should be leading the region. The government can’t presently sell Telstra and the longer it waits, the less the carrier is worth. Wait another few years and taxpayers will be stuck with a loss-making telco of last resort.

Compare this to the way the Indian government has directly stimulated foreign and domestic investment in the ICT sector and one wonders if there is a politician in Australia that actually knows the meaning of a domestic ITC skills base and capability.

As a government-owned corporation, Telstra is supposedly the flagship of that capability. Yet every move it makes in its own backyard is decried by corporate interest groups feathering their own nests.

Such groups should not be allowed to hold national ICT policy to ransom at a time when Australia is falling behind the rest of the world in terms of developing a telecommunications industry.

Nor should they be allowed to run the value of Australia’s communications infrastructure into the ground for the cynical motive of buying it out at a fire sale price.

You won’t hear that in the The Australian newspaper or Channel 9. Just look at what PBL and News did to the last phone company they owned.

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