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Australia's largest telco to be split

Posted by ScuttleMonkey on 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."

4 of 126 comments (clear)

  1. About time by Relic · · Score: 4, Interesting

    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)

  2. This will be contraproductive aswell by A+beautiful+mind · · Score: 4, Interesting

    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.

    --
    It takes a man to suffer ignorance and smile
    Be yourself no matter what they say
    1. Re:This will be contraproductive aswell by Coeurderoy · · Score: 4, Interesting

      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.

  3. Its a poor option by matt21811 · · Score: 5, Interesting

    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.