Australia's largest telco to be split 126
Pie Pants writes "Australia's largest telco company, Telstra, which is also half government-owned and controls most of the telecommunications network in Australia, is to be split into separate retail and wholesale arms. This means that the wholesale side of Telstra will have to sell the network to the retail side under the same terms it uses with other communications companies. The government has done this in a bid to improve communications service in regional Australia, so it can privatize the rest of the telco. This is a welcome move by many after Telstra was accused of taking advantage of its network against competitors."
About time (Score:4, Interesting)
Re:About time (Score:5, Insightful)
If a government agency is doing a poor job, try doing what you would do in a private agency, fire somebody. Instead they 'fire' the whole agency.
Municipal broadband seems to be terribly great in USA. So much so that the private companies are paying their last dollar to get laws to forbid it. The idea that government run agencies are poor is an old tired excuse that really shouldn't work on the people anymore.
This does not mean I support what is going on in Russia either...
Re: privatization isn't the answer (Score:1)
Then they deregulated and slowly split up Bell until we arrived at a situation where we have a private, largely deregulated series of companies that exploit their control over the phone network to squish competition, especially in broadband.
They boost local phone rates (another monopoly area) to the point where poor people can't afford phones because they now have to compete with ga
Re: privatization isn't the answer (Score:2)
So, you can get a dry loop with a DSL ISP of your choice and not subscribe to a single Bell service. That's not a monopoly.
Local phone service c
Re:About time (Score:2)
The split is nothing new, it's just a formality for the sale. Telstra has been regulated to operate as wholesale/retail for many years by "competion laws" (they were dragged into competition kicking and screaming). I am more interested in who gets to spend the $3,000,000,000(AUD) "deal sweetner" [abc.net.au] and how is the taxpayer compensated for the loss of "universal access" benifits.
In the
Re:About time (Score:2)
Re:About time (Score:2)
Re:About time (Score:1)
Re:About time (Score:2)
How is this different from the shareholders voting out a bad CEO? Except that in publicly held companies there is no 1 man 1 vote.
What's new? :-\ (Score:1)
I don't actually understand what's new about this... speaking as an Australian:
First of all, the plans to privatise Telstra have been around for AGES and this is certainly nothing new.
Secondly and perhaps more notably, I thought that the telco was already split into wholesale/retail. At least, there is currently a wholesale and retail website, which are presumably registered and separate businesses...:
Completely different as far as I can s
Its a good thing! (Score:1, Funny)
Re:Its a good thing! (Score:2)
This will be contraproductive aswell (Score:5, Interesting)
The ISP arm ends up swallowing loss and unfavorable conditions while milking the consumers, and passes the revenue to the telco arm. This makes competition have a very hard time and the government ends up shrugging. Do not have a false sense of success just yet, dear australians. This won't work and your government knows that.
Re:This will be contraproductive aswell (Score:3, Insightful)
The ISP arm ended up paying the telco arm after traffic, not after bandwith, which means they are basically not losing anything since it's between two arms of the same company, but it will force other companies to do the same in the immediate future instead of paying after bandwidth.
Re:This will be contraproductive aswell (Score:2, Informative)
I take your points, but I wouldn't be so quick to dismiss it. We have a Competition and Consumer Commission [accc.gov.au], which while not perfect, will be all over the split Telstra, not to mention an increasing number of smaller ISPs and telcos who will scream blue murder if any such thing takes place. A large number of people in the local industry have been chasing this result for years.
It wouldn't be beyond this government to try a sly act like you suggest, but Australia
Re:This will be contraproductive aswell (Score:4, Interesting)
Re: This will be counterproductive as well (Score:3, Interesting)
Gas and Electricity are done in the same way over here, with a wholesale network provider, and the service providers all use the same (pipelines|grid) to supply power, with their own billing structure and extras on top.
This method does mean that there is still no compe
Re: This will be counterproductive as well (Score:1)
Re:This will be contraproductive aswell (Score:1)
Re:This will be contraproductive aswell (Score:2, Insightful)
Re:This will be contraproductive aswell (Score:2)
That way, the government sets the wholesale price, provides infrastructure (thus *will* provide telecommunications in regional areas), levels the playing field for companies needing to lease infrastructure and makes a tidy sum of cash.
Then again our government is the pinnacle of laziness, beaurocracy, elitist arrogance and inefficiency so perhaps it's better private.
Cheers
Stor
Dear Aussies (Score:4, Funny)
Re:Dear Aussies (Score:2)
So, you are suggesting that you should a million companies that support just 4 ppl each? You have seen the dumb joke about PROFIT here, yes? [cia.gov]
Unfortunately that's it (Score:5, Insightful)
Re:Unfortunately that's it (Score:1)
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:1)
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:3, Interesting)
How unfortunate for those of us who earn well above the average salary.. and are looking for our first home. I am expected to pay rent _and_ save 5% of the price of a house over 6 months in order to qualify for a loan... and all that while paying an enormous amount of rent because the price of the house we're in went up exponentially.
Problem is that house prices here have gone up by well over 50% in the last 5 years while sal
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:2)
Re:Unfortunately that's it (Score:1)
No, I complained for a few years about that too. In 2002 I discovered that it is all crap. You save what you can, get a personal loan from Westpac for the rest you need to show and apply to the NAB for the mortgage.
I now have 3 mortgages in Sydney based on my own salary which, as you say, has barely changed since 2000. My parents haven't a cent to give me s
Re:Unfortunately that's it (Score:1)
Re:Unfortunately that's it (Score:2)
Then if you want to compare the tax system differences, it's really trying to compare oranges with apples.
Re:Unfortunately that's it (Score:2)
You'll hear plenty of agents telling you otherwise. My favourite agent comment, "prices never fall drastically... holding out won't save you much". Yet "never before in history has housing costs gone up so sharply". Anything is possible.
The market is slowing rapidly. Just look for the signs.... In the average mailbox... how many of those Agent
Re:Unfortunately that's it (Score:2)
Problem is, the bubble has burst. I agree, rising petrol (mainly) and the general rise in energy costs (gas, electricity, etc) over the last few years has pushed most people over the razor's financial edge that they were teetering on.
Banks haven't helped. They've become only to h
Good for the people, not so great for the govt. (Score:4, Insightful)
Australia has plenty of 3rd paty telcos at the moment. Not enough to cause the wide-scale state-to-state confusion that apparently pervades the US, but enough to provide choice if you want it.
While the idea of creating a wholesale and retail arm will hopefully provide better service for the 3rd party telcos (Telstra owns most of the broadband backbone here) it still mystifies me as to why the goverment would divest itself of an organisation that actually makes a profit, particularly since in doing so they pretty much guarantee rural services will run into problems as soon as no-one's watching.
Re:Good for the people, not so great for the govt. (Score:2)
Re:Good for the people, not so great for the govt. (Score:2)
Remember a telco will have a phone swtich, not just resell Telstra services.
Its a poor option (Score:5, Interesting)
Re:Its a poor option (Score:1, Interesting)
The real issue is that Telstra can favour its retail arm by providing for example quicker activations on ADSL accounts than it provides to other 3rd party vendors.
This is a known fact through out the industry but little action can be taken. When the Telstra Retail has the same rules applied to it as every other vendor the field should be levelled thus ensuring (hopefully) more competition.
Re:Its a poor option (Score:2)
Re:Its a poor option (Score:3, Interesting)
Currently their wholesale connection fee alone is higher than their retail ISP's monthly plan. They still make money overall, but any competing ISP is already running at a loss, even before bandwidth, maintenance, staff costs etc. Splitting off the retail side will prevent them from hiding their costs, and force the wholesale side to deal equally with competitor IS
Re:Its a poor option (Score:2)
Verizon does the same thing in the US. I know of one ISP [flex.com] that actually tells its users that it's cheaper to go directly to Verizon than go through them (though they'll still accept people that want to pay more, and for business customers who want a static IP, they're still cheaper). Verizon offers 3.0/768 at $29.95/month, and charges $37.50/month to connect you to a different ISP.
Re:Its a poor option (Score:2)
Re:Its a poor option (Score:1)
This option was considered, but dismissed by both the government and the opposition after a parliamentary inquiry [abc.net.au] in 2003.
It would be interesting to know why the current plan is more efficient, if not for more cynical reason of raking in a few billion to bribe voters in marginal electorates with when all of the infrastructure is sold off...
For those in other countries... (Score:3, Informative)
(one told me that 384Mb ram wasnt enough for cable and that 30 metres of pristine cat5 could lose ~60mbit in throughput, despite the fact that the theoretical limit of my cable was 10mbit)
Anyway, a good british comparison would be BT and an american one could be AOL (maybe comcast)
Re:For those in other countries... (Score:2)
Re:For those in other countries... (Score:2, Interesting)
British Telecom have been fighting tooth and nail not to be broken up with considerable success, although they've finally agreed to give up the local loop. (They did loose Cellnet->O2 as they've found they paid too much for the G3 license.) In the mean time, I believe they've deferred the UK's adoption of broadband by about 7 years by kil
Re:For those in other countries... (Score:2)
There's really no good American comparison. The old American telephone monopoly was split up when things were very different (the internet wasn't particularly important at the time), and split up rather differently in any case.
Not just Australia's largest Telco (Score:2, Interesting)
Re:Not just Australia's largest Telco (Score:1, Insightful)
Re:Not just Australia's largest Telco (Score:3, Informative)
Hang on... it is going to be split? (Score:2, Informative)
It does not look like today's news [abc.net.au] stories [news.com.au] agree [afr.com] with this statement, however.
Read the article (Score:4, Informative)
Read the article. It doesnt say it will be split, it talks about rumors that a split might have been approved by the *cabinet*, that means the bill probably hasn't even been written yet, even if you assume that the rumour is true.
Thats not to say it wont happen at some time in the future, but at the moment its just speculation, and the title of the story is grossly misleading
More than just a rumour (Score:3, Insightful)
The language used is pretty firm about it. The Australian doesn't generally report rumours, they stick to the facts.
Re:Read the article (Score:1)
"Telstra will be required to maintain separate retail, wholesale and network business units and to publish internal contracts setting out non-price terms and conditions. The model for operational separation was developed on expert advice in consultation with Telstra and the ACCC. The details of price equivalence arrangements under this model will be determined though a working group under the
Obvious solution (Score:3, Insightful)
Having said that, it would be preferable for the Govt to retain certain parts of the network infrastructe in regional areas where such provision is unprofitable. That after all is one of the roles of the state - to correct areas where there is a market failure!
The sad thing is that for years the Govt has said this was impossible and couldn't be done. That was complete crap then - and lo and behold now the Coalition has theoretical control of the Senate they can make it happen. At least it appeases the "rebel" Senators.
As for Peter Costello's "you can't be half pregnant" (a statement referring to the half ownership of Telstra by the AU Government) perhaps Disco Pete should use condoms when he decides to screw the country!
Good move (Score:3, Insightful)
It's a pity that the price of this move is the just about definite sell-off of that remaining government stake in Telstra. The sale is going through because the Gov got a majority in the senate at the last election (first time sice the late 70s) so they can push it through now. But this in turn means they have to placate their coalition partners, the Nationals, who only care about Telstra services to the bush being at parity with the city - i.e. heavily subsidised. So we finally get the Telstra split to allay fears of Telstra pricing getting out of control without the Gov holding them back. I would have like the split+maintaining Gov control. Actually there was a plan floated I believe which would sell off some parts - such as the ISP side of things, but keep infrastructure and wholesale under Gov control - the best of both worlds I think.
Of course it's all going now in the final stage of Uncle Howard's Great Fire Sale where all the nation's assets get sold off for short term gain.
Re:Good move (Score:2)
Unless they change this policy, then peering with peer points such as WAIX it's not going to matter.
The Facts: (Score:1)
where is my money? (Score:2)
The 'Network' used to belong to the people of Australia, maintained by Telstra, now the people of Australia has had their network sold for them and we see nothing. Bah! You either have open playing field or nothing, by inposing conditions on Telstra that are not the same for competitors means that Telstra is stuffed, the government has sided with big business and not with people.
Damn, Its about Time (Score:1)
New Zealand (Score:2, Informative)
Been waiting for years (Score:1)
The share price droped because.. (Score:1)
And it's about time too... (Score:3, Interesting)
Aside from owning the copper (an extremely valuable asset, especially given the relatively low population density in Australia), Telstra provide a range of services - most notably mobiles (MobileNet) and Internet (BigPond, or as I prefer, LittlePuddle) and perhaps the most important of which is ADSL (both wholesale and retail). The issue they are addressing here is leveling the playing field, which would not have been necessary were it not for antics like selling (previously flaky, unreliable) ADSL retail cheaper than wholesale! (One could also speculate that the regular, extended outages were related to sustaining the golden goose (ISDN)).
And then there's the issue of their core competency: phone lines. In March 2000 we were paying $11.65 a month for line rental and something like 25c for untimed local calls. Now your average punter's paying the best part of 30 bucks a month for line rental and a bit less for locals. There's a bunch of capped call plans and other fluff but we're effectively paying a lot more for a service which (thanks to mobiles) we are using a lot less. Plenty of us were using the lines for Internet services and paying for an expensive, unnecessary dialtone.
This is where Australia really could have led the way - were this done properly all carriers (including the hypothetical Telstra retail/services division) would have had access to the copper for the same reasonable price (ideally inside $10/month) and could have offered combined voice/data services, and made a profit, for less than what we're paying now for line rental alone. As a bonus our essential infrastructure would not have ended up strapped to a bloated services company in a volatile market.
Still, it never ceases to amaze me that they've managed to sell us back something we already own, set the industry back a good 5 years while doubling or even tripling the cost of communications for your average Aussie in the process. It's like the Coca Cola company working out we'd pay more for water than we do for Coke itself!
Re:And it's about time too... (Score:1)
ISDN was unbelievably overpriced. Get the customer to do their own A/D and D/A conversion, and make them pay a massive premium.
Here's more examples of why this is needed (Score:2)
No longer will they be able to attract customers just by hiding their costs in their wholesale arm. They'll actually have to provide decent service and reliability for a change (BigPond has consistently rated bottom of the heap [zdnet.com.au] in customer service surveys - which they of course deny).
Telco and Star Wars over the horizon radar network (Score:1)
Nothing to do with regional service (Score:2, Insightful)
It only has to do with the current Australian Government's policy of selling off all public assets and giving the proceeds to the companies you've sold said assets to.
Yep, you read right. In an effort to convince people that they're going to improve service in the bush, our lovely Aussie government is talking about using the proceeds of the sale to pay Telstra (that's the telco in question) to provide a s
Re:Nothing to do with regional service (Score:1)
It'll drive up the initial share price for the last 51%, which is all the Government cares about. If they can get more back through the sale than they're spending now, they're happy. Screws the rest of the companies out there tha
Shhhh! (Score:1)
Telstra has been abusing its monopoly for years, charging ISPs more for wholesale services than it charges retail. Alas the chance of getting some clear, visionary thought (ie past the next election) from this government is depressingly low.
Welcome? (Score:2)
Telstra has been accused of taking advantage of its competitors when the first one appeared! Funny how owning and running the infrastructure AND being able to decide on the price to access the infrastructure makes people squeamish.
And may I also add that this plan has been discussed for so many years I look at the news article and still don't believe it. Lets see what Telstra's "Dirty Tricks"
Telstra is a joke (Score:1)
They've single handedly held back the IT industry in Australia for years with their incredibly backward and stingy policies towards broadband and data l
Finally a step in the right direction (Score:2)
This week Telstra announced a $4.5 billion profit, whilst the new yankee CEO had the audacity to demand the government a) chip in $5 billion to fix up the network and b) threaten to reduce s
Telstra Australia Split !? Digital Nation next? (Score:1)
It's been a long time coming, but finally it looks like Telstra will be split in two very seperate companies.
One to provide Wholesale Telecoms and the other to provide Retail Telecoms services.
This is so horribly over due!
We may be on the verge, finally, of seeing some real competition in the Australian teleco market place.
Telstra naturally are not very happy about what is now an approved [by cabinet] package, which will force them [Telstra] to create seperage network and retail divisions, with sep
Oh God (Score:3, Interesting)
In the house I bought last year, I found a tag on the ground strap for the phone line that was probably put there in the 50s. It harkened back to a day when things were more organized and orderly because there was little room for doing things differently. The tag was essentially a threat that said you MUST NOT remove the ground strap and if it is accidentally cut or loosened, you MUST call the phone company to get it replaced or reattached. Those were the good old days. The problem today is one of "too many chefs". The chefs need to be sent back to R&D where they belong and only the best ideas should be put forward for production. This is why Bell Telephone service was exccelent compared to the mire of crappy phone companies we have now. Not to mention the addition of people who know nothing about phone service providing phone service thanks to VoIP. Deregulation is a bad thing. It destroys carefully controlled systems that MUST be carefully controlled. Just because there is a new or cool idea out there doesn't mean it should make it to production in a short period of time. That's why phone service in the U.S. is so friggin bad. Our entire infrastructure is essentially partially in beta. The only things that do work properly and reliably are the older systems that were put in place before the deregulation.
Be afraid. Be VERY afraid.
Re:Oh God (Score:2)
Re:Oh God (Score:2)
Re:Oh God (Score:2)
Long distance in the US is a thriving competitive market - rates very greatly - if you dial 1-plus on a line that isnt subscribed, you can pay over 95c a minute. Or you can shop around and get 4c or less a minute, or with some plans, unlimited for zip. The 1010 codes are an option - you can always
Misuse of Public funds (Score:2)
The reality is we're being scammed.
What isn't made clear to the masses, is we have a semi private entity set to get approximately 3 billion dollars of public funds, to expand a soon to be privatised network.
Yes the funds are available to other companies, but if the HiBiS scheme is anything to go by, Tel$tra will get a big slice of it.
We paid for the infrastruc
Re:Misuse of Public funds (Score:2)
Re:Misuse of Public funds (Score:2)
We Australian's are so blind. We witnessed the creation of the baby bells only to repeat the same mistakes.
If you read the detail, you will find the seperation is only internal. It's not a full division of assets, products and revenue streams. Tel$tra are still one company, only the internal secret dealing between Bigpond and Telstra wholesale will now be public.
Re:Misuse of Public funds (Score:2)
If you are talking about the AT&T breakup, it never required that - all it did was eliminate the long distance monopoly (and we are reaping the benefit of that today - long distance service in
Re:Misuse of Public funds (Score:2)
The Tel$tra breakup is not so much a split of copper and dialtone/switched services, but rather a retail and wholesale breakup. Telstra already wholesales copper/dialtone/switched services, but currently give much better pricing to it's own retail divisions. Hence the split is about evening up the playing field for all retailers, even Telstra's own retail arm.
Rob
Re:Australia has telcos? (Score:2, Funny)
Re:Australia has telcos? (Score:1)
I thought electrons go the other way around too down there...
I kid, i kid...
Re:Australia has telcos? (Score:1)
Which, coincidentally, is the speed of Telstra Broadband.
Re:Australia has telcos? (Score:3, Insightful)
That's why I recommend Telstra Broadband.
(apologies to whoever I, uhhh, borrowed that from)
Re:Wow! Yet ANOTHER story from Australia! (Score:1)
d
Re:Wow! Yet ANOTHER story from Australia! (Score:1)
Re: (Score:1)
Re:Wow! Yet ANOTHER story from Australia! (Score:1)
And there's plenty interesting stuff going on in Australia, especially if you think Telstra is eeeevil!
Re:Slashdot is too Australia Centric (Score:1)
Already, after a week with control of our senate, they are giving the opposition the finger. That is why there is n
Re:Slightly OT - please drop cultural cringe (Score:1)
Haven't you ever been to Australia? Come down! Come to Melbourne in November/December/Jan, when it's (usually) nice and warm. The other states have nicer weather but we have nicer people
Cheers
Stor
Re:Slightly OT - please drop cultural cringe (Score:1)
Haven't you ever been to Australia? Come down! Come to Melbourne in November/December/Jan, when it's (usually) nice and warm. The other states have nicer weather but we have nicer people
And if you do, make sure you're here for the first Tuesday in November - public holiday for a horse race (we DO have some priorities right).
Re:Slightly OT - please drop cultural cringe (Score:1)
Get used to it folks - the two Kangaroos I live with got used to it last night.