Telstra needs to divide its operations, says regulator

05 September 2011 |


The Australian Competition and Consumer Commission (ACCC) has called for Telstra to undertake a structural separation of its wholesale and retail operations.

Telstra, which has signed an A$11 billion agreement to roll out Australia’s National Broadband Network with NBN Co, has been through a difficult series of negotiations in recent years. It appears that its troubles are continuing.

The ACCC has declared that the telco’s current position does not meet legislative requirements, stating: “Telstra’s undertaking cannot be accepted in its current form and important changes are required.”

ACCC’s problems lie clearly with the fear that Telstra, as the business is structured, carries too much weight within the Australian telecoms market. It has therefore called upon Telstra to submit a plan showing how it will be “structurally separated” by 2018, which it states is a requirement of the agreement reached with NBN Co. The ACCC has issued a discussion paper inviting comment from industry stakeholders to examine the issue.

“The ACCC’s initial view is that there needs to be a clear and enforceable commitment to an ‘equivalence of outcomes' that enables wholesale customers and Telstra’s retail businesses to gain access to key input services of equivalent quality and functionality,” said ACCC chairman, Rod Sims.

Although it does state that it believes this issue to be “readily correctible”, the ACCC admits that it has serious concerns about the arrangements between Telstra and NBN Co, particularly highlighting the fact that the two parties can vary the arrangements without needing scrutiny by the ACCC.

Whether these comments have troubled Telstra or not, remains to be seen. In the meantime, the telco has been busily alerting the industry to its advances in the realm of IPv6, stating that its internet backbone is now fully dual-stacked. This means that Telstra’s enterprise, government and wholesale internet customers can now access the global IPv6 internet, as part of “an ongoing programme of work”.