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Communications IT

Australia's largest telco to be split 126

Posted by ScuttleMonkey from the what-would-we-do-with-a-monopoly-to-fight dept.
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."
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Australia's largest telco to be split More

Australia's largest telco to be split

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  • About time (Score:4, Interesting)

    by Relic ( 92325 ) on Wednesday August 17, 2005 @03:30AM (#13337273)
    About time this happened. From looking at other countries with a similar solution, this seems to open the broadband market wide open for end-users (referring to sweden, where my understanding is that things work in a similar way)

    • Re:About time (Score:5, Insightful)

      by dnoyeb ( 547705 ) on Wednesday August 17, 2005 @06:11AM (#13337730) Homepage Journal
      Privitization is just a money grab for the friends of politicians. You can bet they already know who will own the thing.

      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...
      • Indeed. In Canada, the telco had always been a government-regulated monopoly. And you heard all the complains I'm reading now.

        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
        • Except the bleak picture you paint doesn't really exist, does it? Bell is forced by the CRTC (Canadian version of the FCC) to share their lines with other ISPs for a regulated price. This has lead to good competition as dozens of smaller ISP offer DSL service at equivalent or even lower prices than Bell. Bell is also required to offer dry loops, even for other ISPs.

          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
      • "Privitization is just a money grab for the friends of politicians. You can bet they already know who will own the thing."

        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
      • Government agencies are definitely not poor, with enough support in Congress they can have a near unlimited budget. It's the efficiency of a government agency versus a free market that comes in to question. See history for examples [ncpa.org]
      • you obviously don't live in australia do you. because if you did you'd be aware of the constant double standards between telstra's retail and what they deal out to everyone else. at one stage telstra were retailing ADSL for cheaper then they would sell the port to other isp's. how is that good for anyone? this was a move for the people, benifiting the community. fuck telstra and their profit grabs, they OWE the australian people this, we paid for all their inferstructure through all those years of tax dolla
        • Now watch Telstra wholesale buy way over priced services from Telstra retail in lieu of actual payment of wholesale supply fees.
        • If you read my post you would have realized my recommendation would be to punish those in Telstra making the decisions the people disagree with. Because since its government run you can do that sorta thing.

          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.

    • 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

  • 9 out of 10 crocodiles approve!

  • This will be contraproductive aswell (Score:5, Interesting)

    by A beautiful mind ( 821714 ) on Wednesday August 17, 2005 @03:37AM (#13337288)
    I've seen it happen in my native country, Hungary, when a monopoly telecommunication company was split up this way.

    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.
    • One of the examples i forgot to mention is for example about the sale of traffic.

      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.
    • This won't work and your government knows that.

      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)

      by Coeurderoy ( 717228 ) on Wednesday August 17, 2005 @04:22AM (#13337429)
      It happened the same way in France, they "split" France Telecom (Operator) and Wanadoo (ISP), and since although they are supposed to be different companies they are not really. (same schools originally, same teams, and of course same "investors"). So now "big news" FT is reintegrating Wanadoo (with probably a name change). And yes rural broadband is a problem.
      • It seems to have worked in the UK however. It isn't ideal, but apparently broadband coverage is 97% of the population. Unbundling lines isn't working great, but the system has been changed recently and should mean higher uptake in the future.

        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
        • 97% of the population covered means that about 50% of the rural areas are NOT covered. In addition you might want to look at the relative coverage of various offerings. Where do you have 25Mb/s, 8Mb/s, 1Mb/s, 128kb/s (also called "broadband" by France Telecom in small cities) ? And you will notice that the Internet Geography has a direct influence on the economical geography and housing prices.
      • Interesting... so it looks like any half-hearted split won't work in the long term. My money's on a half-hearted split if there is one.
    • The kind of split they are considering for Telstra is into two separate wholesale and retail arms (similar to what has been done with BT, as I understand). This is important, because at present Telstra sells its services to end users, but also rents out space in its telephone exchanges for other providers to host their equipment -- except the wholesale prices Telstra charge are sometimes so high as to prevent other providers from competing against Telstra's retail products (which is, coincidentally, in the
    • I've never understood why they don't suck up the wholesale/telco arm into the government and let the consumer arm be 100% private.

      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)

    by speights_pride! ( 898232 ) on Wednesday August 17, 2005 @03:37AM (#13337289)
    Please also inform the New Zealand Government about this plan. Although in our case the monopolistic Telco would be better split into about one million pieces. Thanks.

  • Unfortunately that's it (Score:5, Insightful)

    by QuantumG ( 50515 ) <qg@biodome.org> on Wednesday August 17, 2005 @03:41AM (#13337301) Homepage Journal
    They telco will not be broken up into regional companies and forced to compete with one another. Of course the billions of dollars the government receives from the sale won't be going into my pocket or the pocket of any other Australians who have supported it through taxes all these many years. The money will most likely go into the national surplus where it will stay. This, apparently, has some positive effect on the reduction of interest rates. Which has been shown to be a major contributing factor to get the home owners of Australia to re-elect the current government.
    • And no-one seems to get that high interest rates aren't such a bad thing. If you're saving money - it's great! On the other hand if you've got enough credit cards to create your own suit - which apparently is most of us these days - then you probably won't enjoy it much.
    • not one cent of taxpayers money has been used by Telstra, In a couple of cases there have been BILLIONS of dollars handed to the Government, get the FACTS!
      • Excuse me? I assume all those phone lines were there when we colonised the place? Are you saying it wasn't my parents taxes that paid for those lines to go in?
        • Yep, from the earliest times the telecommuncations side of the PMG, then Telecom, then Telstra ran at a profit and financed the expansion of the network, and consistantly returned money to the Government. Taxpayer funded telecommunications in Oz is a Myth. In fact almost every rural service is run at a loss, the cost of providing the service and the links to the rest of the network is rarely recovered from the phone charges. A ballpark figure for just the cost of wire from the switch to the rural phone is ~
      • Actually money does flow the other way through things like HiBIS. http://www.telinfo.gov.au/HiBIS%20page.htm [telinfo.gov.au]
        • Telstra is using HiBIS to knock out wireless ISPs. In real rural areas there is no way to get backhaul except Telstra so they are end up getting most of the HiBIS money anyway. It would have been better for everyone if that program didn't exist.

    • This, apparently, has some positive effect on the reduction of interest rates.

      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

      • You do realise that if you hold out for another year or so this housing bubble is going to burst hardcore? I mean there is no way these prices will hold, right now the best way to describe the housing market is tulipomania [wikipedia.org].
        • Frogbert has it right. Sit tight. The Australian property market is like Doctoms before the bust. You also don't need interest rate movement to pop the bubble - rising petrol prices mean that many of the people in marginal financial situations in these capital city periphery housing developments are already up the creek. There are going to be a lot of McMansions for sale soon as people realize that regardless of interest rate movement, increasing fuel costs are going to bust their budget.
      • Prices here are far over inflated; you need 2 good incomes, no children, no life and rich parents to afford anything that isn't in some grotty ghetto.

        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

      • Hah, what a joke. I moved to Edinburgh from Australia, you try to paying rent here for a while. 300 pounds to share a two bedroom apartment, in a shitty building. Plus 100 pounds council tax every bloody month. Of course, everything else you say I agree with, but don't talk about Oz being expensive.
        • Yes rent is expensive there. But the wages are far highier. It's a scale of economy thing.

          Then if you want to compare the tax system differences, it's really trying to compare oranges with apples.
      • The bubble is already bursting. The latest Sydney trends are showing a fall in prices and it's likely to trickle through to the others cities, just like the rise did.

        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
        • I can attest that the bubble is bursting. On my way to work I see at least a dozen "For Sale" signs, and it's only a 10 minute drive. On my way to pick up my son in the evening I see another 10, and that's only a 5 minute drive.

          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)

    by TooTrueTroubs ( 630665 ) on Wednesday August 17, 2005 @03:42AM (#13337305)
    This move toward privatisation is something I'll never understand.

    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.

  • Its a poor option (Score:5, Interesting)

    by matt21811 ( 830841 ) * on Wednesday August 17, 2005 @03:44AM (#13337309) Homepage
    The Australian government would do better to keep the wholesale part of the business and sell the retail part. Forcing Telstra to divide itself only internally will lead to a situation where they can sacrafice the retail sales but make a killing on the monopoly wholesale business. Screwing customers for all they can. Once the compay is in private hands there will be little the government can do about it.

    • Re:Its a poor option (Score:1, Interesting)

      by Anonymous Coward
      There are regulations in place to stop the monopoly on the wholesale side of things.

      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:3, Interesting)

      by Namarrgon ( 105036 )
      They're already screwing their wholesale customers by taking full advantage of their wholesale monopoly, right now. A split can only help that.

      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

      • Currently their wholesale connection fee alone is higher than their retail ISP's monthly plan.

        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.

    • The problem is that without infrastructure Telstra isn't worth 10billion: let alone $40. You can't win 2 elections on a mandate of selling telstra and then just not sell it.

    • 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)

    by BlackMesaLabs ( 893043 ) on Wednesday August 17, 2005 @03:44AM (#13337311)
    Telstra (Internet division: Bigpond) has a reputation here as a cumbersome, inneffectual and generally crappy ISP. The service is shoddy & slow, the tech support takes hours to connect and technicians are worse than monkeys
    (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)
    • Did anyone mention that they only talked about offering retail and wholesale DSL speeds above 1.5mbps when smaller compeditors started investing in DSLAMs?
    • Mmm, as I thought, another monolithic monster who probably own the local loop. Sometimes the large old Crock needs to be removed from the pond for the good of everyone.

      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
    • Anyway, a good british comparison would be BT and an american one could be AOL (maybe comcast)

      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.

  • Telstra is also Australia's largest company, full stop. This move has reduced the value of the company by some $2 Billion AUD prior to a full sale. Not good for shareholders. Ultimately, not good for customers.

    • Re:Not just Australia's largest Telco (Score:1, Insightful)

      by Anonymous Coward
      Please explain why the loss in value of a company will be detrimental to customers? Will it not make the company work harder? Does the company with a higher value provide better service? Where is the logic?
    • Perhaps this is because investors presume that Telstra's lessened ability to exploit its monopoly position will result in less profits, due to increased competition. Unless the businesses are much less efficient in providing services as separate entities, those reduced profits will be directly seen as reduced prices. How is it bad for consumers if prices go down due to competition?

  • Hang on... it is going to be split? (Score:2, Informative)

    by Anonymous Coward
    If Telstra is going to be split, that's wonderful news and what I've wanted all along.

    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)

    by nobbin ( 823426 ) on Wednesday August 17, 2005 @03:49AM (#13337324)
    I thought this sounded like too bid a news story to not have heard about.
    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

  • Obvious solution (Score:3, Insightful)

    by Anonymous Coward on Wednesday August 17, 2005 @03:51AM (#13337337)
    The breaking up of Telstra's wholesale and retail arms has been proposed by various groups and individuals for years. Provided the terms & conditions of the contracts allowing access to the wholesale arm are transparent, and that the powers of the ACCC to investigate are improved, this solves the principal problems with the full privatisation of Telstra.

    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)

    by lamasquerade ( 172547 ) * on Wednesday August 17, 2005 @03:52AM (#13337339)
    I am very happy that this is finally going to happen, now we'll see Bigpond (Telstra's ISP) compete evenly with other providers. Maybe bigpond will even join WAIX [waia.asn.au], Western Australia's peering network, and other similar organisations around Aus.

    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.

    • Not going to happen, where Telstra does peer with ISPs, Telstra's BGP setup makes their data flow within it's own network.

      Unless they change this policy, then peering with peer points such as WAIX it's not going to matter.
  • Why this means good things for us aussies? It means that it also opens the book up for smaller providers to buy services from the wholesale provider, which in previous times has been pretty hopeless with telstra setting inflated prices and restrictive clauses with the installation of equipment and charging of services while maintaining an artificial pricing structure. Telstra retail will have to compete with optus, iinet, internode, etc etc on the same grounds. If wholesale does retail "favours", the ACCC
  • The story is speculation and only time will tell.

    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.
  • We have been calling for this for Donkeys Now, all they need to do is reduce their prices so people will actually use Telstra

  • New Zealand (Score:2, Informative)

    by daliman ( 626662 )
    With a bit of luck, they'll follow your lead over here. Telecom has improved a lot over the last year or so, perhaps in an attempt to head them off, but the prices here are still over the top.
  • Telstra and the government have been talking about this for several years, so either 1) It will happen very soon or 2)We will be waiting another decade before this actually happens. The National party (not even the shadow cabinet) is trying to get some Telstra services for those who live in remote regions, but last I heard, they weren't doing very well. As far as I see it, most people (especially those in 'power') don't take them very seriously.
  • No wonder the share price is doing so poorly, Telstra's service is CRAP!!!! Well, they have good GSM coverage (I use it on Three's Roaming) but its too expensive. Their other services are ok, but they charge way too much. They need to be split, and the government needs to keep the wholesale arm, and sell the retail arm.

  • And it's about time too... (Score:3, Interesting)

    by samj ( 115984 ) * <samj@samj.net> on Wednesday August 17, 2005 @04:51AM (#13337506) Homepage
    I've been advocating this for years, but thought it was too late after the first share offering (T1) back in 1997 (after all, who wants a telco services company when you can own the infrastructure). A handful of us made a quick buck out of it, but those who participated in the second round (T2) weren't so lucky.

    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!
    • One could also speculate that the regular, extended outages were related to sustaining the golden goose (ISDN)

      ISDN was unbelievably overpriced. Get the customer to do their own A/D and D/A conversion, and make them pay a massive premium.

  • Hopefully, removing BigPond's unfair advantage [zdnet.com.au] might force them to lift their game, and avoid problems like this [news.com.au].

    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).

  • http://www.rlmsystems.com.au/proj_jorn.aspx [rlmsystems.com.au] Jindalee Operational Radar Network (JORN) One of the more interesting Australian telco projects.
  • Actually, this has nothing to do with improving regional service, or as we put it "service in the bush".

    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
    • 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 service to the bush. How's that for a deal!

      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
  • Don't mention to this ideological right-wing government that an astute leftie from way back (Kenneth Davidson of The Age) suggested this years ago, of course suggesting that the wholesale arm should remain owned by the government.

    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.
  • "This is a welcome move by many after Telstra was accused of taking advantage of its network against competitors."

    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"
  • Typical of monpolies everywhere, wether goverment owned or private, Telstra is an absolute joke. They provide poor quality products and absolutely shit service at premium prices. All while using their monoply control over infrastructure to try and unfairly squeeze out competitors who actually manage to provide a worthwhile service at a more reasonable price.

    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
  • Splitting Telstra into infrastructure wholesaling and service retailing companies is what I and many others have been advocating for years. Last year, the government made some progress towards this by ordering Telstra to separate their accounting. This is another step in that direction, however it doesn't go far enough.

    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

  • 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)

    by eno2001 ( 527078 ) on Wednesday August 17, 2005 @09:14AM (#13338746) Homepage Journal
    Australians should be very concerned about what's going to happen to their phone service. Back in the 80s, we had the Bell Telephone company split up into RBOCs (regional bell operating companies). What used to be the Bell Telephone Service became Ohio Bell where I lived. That eventually became Ameritech and then SBC. Through all of these changes, the quality of service continued to drop. The territorial wars increased between RBOCs and newer upstarts trying to get into the telco biz. Where we used to have a national business with shining R&D output (Thank Bell for Unix and Plan 9), and impecable quality of both product and service, we now have a bunch of useless small companies that refuse to cooperate with each other to server customers properly. We have mildly varying rates (save $1.00 or $2.00 a month by "chosing" your telco) with very few options for alternative services because of the territory wars.

    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.
    • The breakup of AT&T was only effective for long distance - and look how cheap that is now, if you shop around. Unfortunately, that breakup left intact lots of smaller monopolies, who still have captive customers with no real choice. As far as territory wars - I have never seen a single shread of evidence that any ILEC ever competed with another ILEC in the same area - try getting service from Verizon while living in an SBC area, or vice versa (*wired* service, that is, I understand competition is thrivi
      • Actually, where I live (Northeastern Ohio) we had our choice of SBC or a lesser known option Corecomm. Corecomm provided wired phone service and I actually had it for a while. It was about $4.00 cheaper than SBC. However, they also were my ISP and they stole my e-mail address and gave it to another customer. The phone service wasn't any better than SBC and I just didn't see the value in saving $4.00 a month only as long as I subscribed to their dial up ISP service. Their normal prices were only $1.00 c
        • Corecomm was/is certainly a CLEC, and was providing you service over SBC-owned copper. Thats the act of 1996. But trust me SBC was sharing that copper only begrudgingly, and dragged their feet as much as possible.

          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
  • This is terrible news. Once again the media has been distracted by the issues of services in the bush, when the real issue is quietly forgotten about.

    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
    • This is a wet dream for individuals and you are griping about it. This is exactly what I'd love to see in the US - the Incumbent bells seperated from their monopoly control over the existing wired infrastructure that was paid for by captive customers under their guaranteed monopoly status, so that it is available on an equal basis to many service providers (of dialtone, internet, whatever), who can them compete on even footings. Unfortunately, it seems like the US FCC is going the other way here, which will
      • Where do you think this split idea was born. You've already lived the wet dream, except you found the sexy girl at the bar was really a man.

        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.
        • Already lived? Which incumbent RBOC/ILEC in the US was ever forced to seperate themselves into one company providing only copper loops, and one providing dialtone/switched services, with the one with the copper required to provide access to that copper to all companies providing switched services on an equal basis?

          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
          • Thanks...I stand corrected on the US situation.

            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

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