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Telstra rivals stressed-out by NBN takeover talk

Telstra’s rival operators are getting all worked up over suggestions that the Australian incumbent could merge with state-owned broadband infrastructure provider NBN.

Optus and TPG Telecom have privately lobbied the government to block any future move by Telstra to take over NBN, the Sydney Morning Herald reported, citing unnamed sources. The government has apparently reassured the telcos that it will take their concerns into consideration, noting that the privatisation of NBN is still some way off. The operators will likely maintain pressure on Canberra regarding NBN’s future though, the paper said.

The story comes after Telstra published new details of its planned restructuring programme, something many seem determined to view as a precursor to a move for NBN.

Speaking on an analyst call earlier this week, Telstra CEO Andy Penn addressed the NBN issue, but his assertion that the telco’s restructure has nothing to do with the potential privatisation of the state business seemed to raise more questions than it answered.

Penn certainly did not dismiss the idea of a merger with NBN, he simply noted that Telstra would have to further separate its fixed infrastructure business – InfraCo Fixed – to become less vertically integrated before making such a move. He also pointed out that any move to privatise NBN is likely to be some time away, something the government itself has also intimated.

But the issue is that while Telstra is not focused on an NBN buy now, the message from the company is very much ‘not now’ as opposed to ‘not ever’ and that is – understandably – troubling Australia’s other operators.

“If NBN Co was sold to Telstra, it would be like someone selling their house but continuing to charge the new owners rent,” TPG Telecom group executive legal and external affairs Trent Czinner told the Sydney Morning Herald. “The new owners then renovate and expand the house, and sell it back for less than they paid to the original owners.”

The paper pointed out that Telstra receives around A$1 billion per year form NBN in return for access to its infrastructure, including ducts, exchanges, fibre and copper network.

Similarly, Optus’ vice president for regulatory and government affairs Andrew Sheridan referred to the “huge value” Telstra has already realised from the migration process to the NBN and warned that any change in ownership would result in more gains for the incumbent at the expense of the taxpayer.

“We should rule out this option right now before it gains further momentum,” he said, adding that it was clear from Telstra’s comments on Monday that it is positioning itself to tie up with NBN in future.

He’s probably right.

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8 comments

  1. Avatar Trevor Tulloch 24/03/2021 @ 11:18 am

    I remember when the internet access was only available by dial-up so Telstra had the had the only means of access. We were forced to use the lines to connect. Telstra undercut all the providers and even the fair trading commission agreeded and said that they should pay a fine for doing it. No fine was ever paid. DO not let them have the NBN keep it separate from any Telco.

  2. Avatar Basil Delimitros 24/03/2021 @ 12:22 pm

    How could they possibly manage the NBN if they can’t even manage a Telstra Velocity network in Point Cook. 7 days without internet or landline is not telco grade service. This is happening right now. It also happened last year for 2 weeks because they had no spare parts. Telsta don’t care about their customers

  3. Avatar Graeme Bellis 24/03/2021 @ 10:44 pm

    The thing is that Telstra’s customer service is appalling. Something the Federal Govt seems blithely unaware of or just doesn’t care. 2hour wait times on calls to a Mumbai Service Centre who then don’t know how to fix a simple service request.🤦🏼‍♂️ This is not atypical. An Telstra App that can only provide billing’s information and no Service Management.🤦🏼‍♂️🤦🏼‍♂️ The lust goes in and on. Ask any Telstra customer and it’s clear Tejstra Management is clueless as to what their primary job function is…. it’s their Customers FCOL!

  4. Avatar Michael Walsh 25/03/2021 @ 2:24 am

    I don’t usually comment but I have to make an exception to simply say ditto the above. Telstra has the worst customer interface I’ve ever encountered. It extends beyond so called “customer service” (Orwellian doublespeak at its best) to the dreadful, franchised Telstra Shops where glib sales talk is offered in place of information. Considering big corporate plays might be little more than a fantasy equivalent of shuffling the deck chairs on the Titanic unless they start pleasing their long suffering customers.

  5. Avatar Paul 25/03/2021 @ 11:01 am

    Telstra is the most arrogant, indifferent arcaic antiquated overrated company in the world.
    Its arrogance in boasting 5G when it cannot even provide ADSL to regional customers. It arrogance in redirecting all calls to India. Its arrogance in not being able to offer a simple Internet connection, its arrogance in over inflated pricing, its arrogance in locking clients into contracts, its arrogance in charging overinflated costs for hardware.
    It is a organisation which is still in the dark ages It is a white elephant which needs to be shut down and a proper company set up in its place. For 30 or more years I have been painfully associated with telstra, the government simply pays lip service to its woes and top heavy management structure. Telstra as a company are an embarrassment to Australia, and the government is an an inadequate toothless tiger who does not care. Telstra needs to go to Europe, you can get an Internet connection with fastest speeds and unlimited data for less than a fraction of ripp off telstra. Connections take from 10 minutes to a few hours with customer service so wonderful, they give you incentives to join them! Telstra go somewhere get a proper communications education and respect people! 5G what a load of poppycock!
    The arrogant monopoly must stop! Competition will wake up this lazy arrogant whit elephant! We all live in hope!!

  6. Avatar Alexa 27/03/2021 @ 3:07 am

    I left Telstra back in 1993 for trying to rip me off with almost a $600.00 bill for 3 weeks when I moved into a new apartment. I rang and explained that the calls on the bill were not mine and I’d contact the TIO if necessary. They refunded the money with an apology. After that incident I went to Optus (the new kid on the block) when their call centres were in Australia. I left them as well once their call centres were located to India, and also for data breach in 2019.
    I shop around for telcos by asking many questions and most importantly where their call centres are located. I’ve learnt from experience to never make the same mistake twice.
    To all the people above who are complaining about Telstra’s crappy internet service, just shop around and leave. If you are locked into a contract contact the TIO and terminate your contract without paying an exit fee and find a better telco. Complaining won’t get you very far except have the guts to leave.

    • Avatar Anthony Fiorentino 05/04/2021 @ 9:45 am

      They have a monopoly in certain areas… it’s either Velocity or nothing. Even FTA TV is thru their cable… no contract no TV.

  7. Avatar Anthony Fiorentino 05/04/2021 @ 9:42 am

    Telstra can’t even manage their Velocity package yet charge exorbitant fees for a service which they admit was never meant to be a fast broadband service. Why would anyone let them get their hands on NBN!

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