TELSTRA IS LOOKING AT DETAIL OF AUST GOVT'S SEPARATION REFORMS
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TLSYY | Quote | Chart | News | PowerRating -- Telstra Corporation Ltd
(ASX:TLS) says it is examining the detail of proposed
Australian government reforms that will pave the way for the
separation of telco's wholesale and retail businesses.
"Telstra is currently examining the detail of the reforms
and will provide an update to the market as appropriate," the
company said in a statement.
Communications Minister Stephen Conroy announced the reforms
on Tuesday, saying they will address the telco's high level of
integration with the aim of promoting greater competition and
consumer benefits.
The legislation allows Telstra to structurally separate on a
voluntary basis, but if it chooses not to do so the the
government will be able to impose functional separation.
A functional separation would require Telstra to conduct its
network operations and wholesale functions at arms length from
the rest of its business.
Telstra would then be required to provide equivalent price
and non-price terms to its retail business and other wholesale
customers.
The telco has long been against the structural separation of
its businesses.
Under new chief executive David Thodey the company has taken
a more cooperative approach to its dealings with the government
than in previous years.
However, Mr Thodey has maintained shareholder value is his
first priority.
Telstra was one of the most highly integrated
telecommunications companies in the world across the fixed-line
copper, cable and mobile platforms, Senator Conroy said.
"The government believes it is possible to achieve a win-win
outcome in the interests of Telstra, its shareholders and, more
broadly, all Australians," Senator Conroy said.
The government will strengthen consumer safeguards including
the Universal Service Obligation, Customer Service Guarantee
and the Priority Assistance arrangements to ensure consumers
are protected and service standards are maintained at a high
level.
"These fundamental reforms address the long-standing
inadequacies of the existing telecommunications regulatory
regime," he said.
"They will drive lower prices, better quality and more
innovative services."
The government will introduce its legislation to parliament
later on Tuesday.
The draft laws will require Telstra to lose its cable
network and divest its interests in the pay television arm,
Foxtel.
Telstra will be prevented from acquiring additional spectrum
for advanced mobile services.
"Unless it structurally separates, divests its ... cable
network and divests its interests in Foxtel," Senator Conroy
said.
Telstra shares were down 13 cents, or four per cent, to
A$31.20 (US$26.89) in early trading on the local stock
exchange.
(AAP) rw
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