Telstra to be split (Australian IT / Michael Sainsbury)

From the article: “TELSTRA will be split in two in an effort to boost competition in the $30billion telecommunications industry as part of a package of reforms ahead of its full privatisation.

The package, believed to have been approved by cabinet last night, will force a furious Telstra to create distinct network and retail divisions, with separate premises and management but under the same company structure.

[..]

Under the Government’s proposed changes, Telstra’s wholesale division, which runs its copper, cable and mobile networks, would be separated from its retail division.

The wholesale division would have to sell services - namely access to networks - to the retail division on the same terms it sells services to Telstra’s competitors. Those companies then on-sell services to their own customers.

The terms would be available to regulators, ensuring Telstra was not hurting competition by charging competitors too much.”

This is great news for competition, but not for Telstra shareholders. Being forced to complete on a more level playing field will almost certainly reduce Telstra’s massive profits seen over the past couple of years. Regardless of this; I still don’t think they’re any any sort of a position to be asking for government handouts to build up their infrastructure. It seems Sol Trujillo still has a lot to learn about the local Telco environment.