Telstra's (ASX: TLS) move to break up the company into separate retail and wholesale units is being delayed yet again as the Australian incumbent service provider just got a 90-day extension to turn its plan.
Although Telstra was supposed to provide its structural separation plan to the Australian Competition and Consumer Commission before April 1, it looks like the plan won't be seen until the end of June. During this time, Telstra will iron out the final details of its agreement to give control of its wireline network to the National Broadband Network (NBN).
Competitive service providers that have long argued for the separation of Telstra's network operations are concerned that the agreement Telstra struck with Stephen Conroy, Australia's communications minister, might not work.
"The concern is that Telstra and the minister could presumably use this tactic to delay Telstra's separation indefinitely," said a telco executive who wished to remain anonymous.
However, a spokeswoman for Senator Conroy said they felt Telstra's separation plan was on track.
"The deal between NBN Co and Telstra will see full structural separation achieved when Telstra migrates its customers to the wholesale-only NBN and decommissions its copper network. As NBN Co and Telstra have stated publicly, their negotiations are progressing well," she said.
One sticking point that's preventing Telstra from submitting its plan to the ACCC is that it has yet to finalize its $11 billion deal to transfer its copper network to the NBN.
For more:
- The Australian has this article
Special Report: Top wireless companies' report strong R&D spending in 2010
Related articles:
Telstra breakup may not be voted on until May
Telstra shares jump as government can't get support for breakup
Telstra strikes out against changes to Australia's NBN plan
Telstra says breakup will come at a steep price