Government dials up Telstra separation


Telstra told to separate retail and wholesale divisions under reforms to telco regulations unveiled today

September 15, 2009

Telstra will be asked to structurally separate its retail and wholesale divisions, on a "voluntary and cooperative basis", under fundamental reforms to existing telecommunications regulations unveiled today by the Federal Government.

Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy claims the reforms will "drive future growth, productivity and innovation across all sectors of the economy" by:

  • Addressing Telstra’s high level of integration to promote greater competition and consumer benefits
  • Streamlining and simplifying the competition regime to provide more certain and quicker outcomes for telecommunications companies
  • Strengthening consumer safeguards to ensure services standards are maintained at a high level
  • Removing redundant and inefficient regulatory red tape.

"For years industry has been calling for fundamental and historic micro-economic reform in telecommunications. Today we are delivering this outcome in Australia’s long-term national interest," Conroy says.

Telstra is one of the most highly-integrated telecommunications companies in the world across the fixed-line copper, cable and mobile platforms.

"The reforms address the structure of the telecommunications market and provide Telstra with the flexibility to choose its future path," Conroy adds.

"It is the Government’s clear desire for Telstra to structurally separate, on a voluntary and cooperative basis."

"The Government believes it is possible to achieve a win-win outcome in the interests of Telstra, its shareholders and, more broadly, all Australians."

The Minister adds the reforms will also promote competition and strengthen consumer safeguards.

"The existing telecommunications anti-competitive conduct and access regimes have been widely criticised as being cumbersome, open to gaming and abuse, and provide insufficient certainty for investment," he says.

Since the commencement of the regime in 1997 there have been more than 150 telecommunications access disputes compared to only three access disputes in other regulated sectors, including airports and energy sectors.

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.

In line with the Government’s commitments to address impediments to Australia’s long-term productivity growth, it will remove unnecessary regulatory burden on the industry.

"These fundamental reforms address the long-standing inadequacies of the existing telecommunications regulatory regime. They will drive lower prices, better quality and more innovative services," Conroy says.

The reforms are supported by the overwhelming majority of the submissions received in response to the National Broadband Network: Regulatory Reform for 21st Century Broadband Discussion Paper released by the Government on April 7, 2009.

The legislative package is available online at www.dbcde.gov.au.

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