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Australia's largest telco to be split
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."
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)
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
Please also inform the New Zealand Government about this plan. Although in our case the monopolistic Telco would be better split into about one million pieces. Thanks.
Guess what? We've even got ELECTRICITY down here too!
They telco will not be broken up into regional companies and forced to compete with one another. Of course the billions of dollars the government receives from the sale won't be going into my pocket or the pocket of any other Australians who have supported it through taxes all these many years. The money will most likely go into the national surplus where it will stay. This, apparently, has some positive effect on the reduction of interest rates. Which has been shown to be a major contributing factor to get the home owners of Australia to re-elect the current government.
How we know is more important than what we know.
This move toward privatisation is something I'll never understand.
Australia has plenty of 3rd paty telcos at the moment. Not enough to cause the wide-scale state-to-state confusion that apparently pervades the US, but enough to provide choice if you want it.
While the idea of creating a wholesale and retail arm will hopefully provide better service for the 3rd party telcos (Telstra owns most of the broadband backbone here) it still mystifies me as to why the goverment would divest itself of an organisation that actually makes a profit, particularly since in doing so they pretty much guarantee rural services will run into problems as soon as no-one's watching.
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.
Telstra (Internet division: Bigpond) has a reputation here as a cumbersome, inneffectual and generally crappy ISP. The service is shoddy & slow, the tech support takes hours to connect and technicians are worse than monkeys
(one told me that 384Mb ram wasnt enough for cable and that 30 metres of pristine cat5 could lose ~60mbit in throughput, despite the fact that the theoretical limit of my cable was 10mbit)
Anyway, a good british comparison would be BT and an american one could be AOL (maybe comcast)
Telstra is also Australia's largest company, full stop. This move has reduced the value of the company by some $2 Billion AUD prior to a full sale. Not good for shareholders. Ultimately, not good for customers.
If Telstra is going to be split, that's wonderful news and what I've wanted all along.
It does not look like today's news stories agree with this statement, however.
I thought this sounded like too bid a news story to not have heard about.
Read the article. It doesnt say it will be split, it talks about rumors that a split might have been approved by the *cabinet*, that means the bill probably hasn't even been written yet, even if you assume that the rumour is true.
Thats not to say it wont happen at some time in the future, but at the moment its just speculation, and the title of the story is grossly misleading
The breaking up of Telstra's wholesale and retail arms has been proposed by various groups and individuals for years. Provided the terms & conditions of the contracts allowing access to the wholesale arm are transparent, and that the powers of the ACCC to investigate are improved, this solves the principal problems with the full privatisation of Telstra.
Having said that, it would be preferable for the Govt to retain certain parts of the network infrastructe in regional areas where such provision is unprofitable. That after all is one of the roles of the state - to correct areas where there is a market failure!
The sad thing is that for years the Govt has said this was impossible and couldn't be done. That was complete crap then - and lo and behold now the Coalition has theoretical control of the Senate they can make it happen. At least it appeases the "rebel" Senators.
As for Peter Costello's "you can't be half pregnant" (a statement referring to the half ownership of Telstra by the AU Government) perhaps Disco Pete should use condoms when he decides to screw the country!
It's a pity that the price of this move is the just about definite sell-off of that remaining government stake in Telstra. The sale is going through because the Gov got a majority in the senate at the last election (first time sice the late 70s) so they can push it through now. But this in turn means they have to placate their coalition partners, the Nationals, who only care about Telstra services to the bush being at parity with the city - i.e. heavily subsidised. So we finally get the Telstra split to allay fears of Telstra pricing getting out of control without the Gov holding them back. I would have like the split+maintaining Gov control. Actually there was a plan floated I believe which would sell off some parts - such as the ISP side of things, but keep infrastructure and wholesale under Gov control - the best of both worlds I think.
Of course it's all going now in the final stage of Uncle Howard's Great Fire Sale where all the nation's assets get sold off for short term gain.
// It had been Fat's delusion for years that he could help people. --Philip K. Dick, Valis
With a bit of luck, they'll follow your lead over here. Telecom has improved a lot over the last year or so, perhaps in an attempt to head them off, but the prices here are still over the top.
I've been advocating this for years, but thought it was too late after the first share offering (T1) back in 1997 (after all, who wants a telco services company when you can own the infrastructure). A handful of us made a quick buck out of it, but those who participated in the second round (T2) weren't so lucky.
Aside from owning the copper (an extremely valuable asset, especially given the relatively low population density in Australia), Telstra provide a range of services - most notably mobiles (MobileNet) and Internet (BigPond, or as I prefer, LittlePuddle) and perhaps the most important of which is ADSL (both wholesale and retail). The issue they are addressing here is leveling the playing field, which would not have been necessary were it not for antics like selling (previously flaky, unreliable) ADSL retail cheaper than wholesale! (One could also speculate that the regular, extended outages were related to sustaining the golden goose (ISDN)).
And then there's the issue of their core competency: phone lines. In March 2000 we were paying $11.65 a month for line rental and something like 25c for untimed local calls. Now your average punter's paying the best part of 30 bucks a month for line rental and a bit less for locals. There's a bunch of capped call plans and other fluff but we're effectively paying a lot more for a service which (thanks to mobiles) we are using a lot less. Plenty of us were using the lines for Internet services and paying for an expensive, unnecessary dialtone.
This is where Australia really could have led the way - were this done properly all carriers (including the hypothetical Telstra retail/services division) would have had access to the copper for the same reasonable price (ideally inside $10/month) and could have offered combined voice/data services, and made a profit, for less than what we're paying now for line rental alone. As a bonus our essential infrastructure would not have ended up strapped to a bloated services company in a volatile market.
Still, it never ceases to amaze me that they've managed to sell us back something we already own, set the industry back a good 5 years while doubling or even tripling the cost of communications for your average Aussie in the process. It's like the Coca Cola company working out we'd pay more for water than we do for Coke itself!
The language used is pretty firm about it. The Australian doesn't generally report rumours, they stick to the facts.
Why would anyone engrave "Elbereth"?
It seems to have worked in the UK however. It isn't ideal, but apparently broadband coverage is 97% of the population. Unbundling lines isn't working great, but the system has been changed recently and should mean higher uptake in the future.
Gas and Electricity are done in the same way over here, with a wholesale network provider, and the service providers all use the same (pipelines|grid) to supply power, with their own billing structure and extras on top.
This method does mean that there is still no competition in the wholesale area, then again I'd prefer that to 2 or 3 times the number of electricity pylons and/or roadworks!
That's why I recommend Telstra Broadband.
(apologies to whoever I, uhhh, borrowed that from)
Actually, this has nothing to do with improving regional service, or as we put it "service in the bush".
It only has to do with the current Australian Government's policy of selling off all public assets and giving the proceeds to the companies you've sold said assets to.
Yep, you read right. In an effort to convince people that they're going to improve service in the bush, our lovely Aussie government is talking about using the proceeds of the sale to pay Telstra (that's the telco in question) to provide a service to the bush. How's that for a deal!
Anyway, we Australians now have no say in this, Australia is no longer a democracy.
Australians should be very concerned about what's going to happen to their phone service. Back in the 80s, we had the Bell Telephone company split up into RBOCs (regional bell operating companies). What used to be the Bell Telephone Service became Ohio Bell where I lived. That eventually became Ameritech and then SBC. Through all of these changes, the quality of service continued to drop. The territorial wars increased between RBOCs and newer upstarts trying to get into the telco biz. Where we used to have a national business with shining R&D output (Thank Bell for Unix and Plan 9), and impecable quality of both product and service, we now have a bunch of useless small companies that refuse to cooperate with each other to server customers properly. We have mildly varying rates (save $1.00 or $2.00 a month by "chosing" your telco) with very few options for alternative services because of the territory wars.
In the house I bought last year, I found a tag on the ground strap for the phone line that was probably put there in the 50s. It harkened back to a day when things were more organized and orderly because there was little room for doing things differently. The tag was essentially a threat that said you MUST NOT remove the ground strap and if it is accidentally cut or loosened, you MUST call the phone company to get it replaced or reattached. Those were the good old days. The problem today is one of "too many chefs". The chefs need to be sent back to R&D where they belong and only the best ideas should be put forward for production. This is why Bell Telephone service was exccelent compared to the mire of crappy phone companies we have now. Not to mention the addition of people who know nothing about phone service providing phone service thanks to VoIP. Deregulation is a bad thing. It destroys carefully controlled systems that MUST be carefully controlled. Just because there is a new or cool idea out there doesn't mean it should make it to production in a short period of time. That's why phone service in the U.S. is so friggin bad. Our entire infrastructure is essentially partially in beta. The only things that do work properly and reliably are the older systems that were put in place before the deregulation.
Be afraid. Be VERY afraid.
-"...bad old ideas look confusingly fresh when they are packaged as technology" - Jaron Lanier (Digital Maoism on Edge.o