Telstra competitors demand operational split

Von Siobhan McBride

Telstra Corp. Ltd."s competitors have formed a united front and released a ten-point plan they say will insure against Australia"s incumbent telco becoming an unfettered private monopoly.

Released by the Competitive Carriers" Coalition (CCC) and Optus, the so-called future-proofing plan for telecommunications competition calls for splitting Telstra"s wholesale and retail divisions and demands all wholesale services available to Telstra Retail also be available to competitors.

Both Optus and the CCC claim the plan is an important statement made possible by the opportunity for lasting reform to be achieved out of the government"s present deliberations on telecommunications reform.

The plan also includes recommendations that increasing telecommunications competition prior to any sale of Telstra must be the Government"s overriding consideration prior selling its remaining stake. The ten-point plan has also been endorsed by the Australian Telecommunications Users Group.

However the government has so far ruled out any splitting of the two divisions of Telstra, arguing regulation of the telco will be adequate to ensure fair competition.

Macquarie Telecom director of strategy, carrier and corporate affairs Maha Krishnapillai claims there is a misconception in government and Telstra that operational separation is unworkable and that the industry cannot agree on a model.

"Here you have Optus, Macquarie Telecom, Hutchison Telecoms, Primus and PowerTel all agreeing on a 10 point plan for effective competition which encompasses everything from operational separation to services in the bush," Krishnapillai said.

"This is a watershed moment. All of the major carriers and service providers have worked together to document what is required for effective competition and reached consensus despite their varied, and often competing interests. "In contrast to what Telstra says, effective competition is an end-user issue not just carriers protecting their bottom line."

Krishnapillai believes that Australians don"t realize how dominant Telstra is until they examine overseas markets.

"Nowhere else in the world is one carrier allowed to dominate so many markets ranging from Internet access, to fixed line telephony to Pay TV; a fact acknowledged by Sol Trujillo when he accepted the position as Telstra"s CEO," Krishnapillai said.