Telstra rails against government-mandated telecom reforms

In the latest development of Australia's telecom reorganization saga, incumbent operator Telstra is now arguing that the government's telecom reforms will not only dilute shareholder value, but also create confusion over the proposed $38.87 billion Next Generation Broadband Network (NBN). In a letter it sent to the Senate about the proposed reforms, Telstra wrote that the mandates could "potentially destroy value for the approximately 1.4 billion Australian shareholders who purchased Telstra shares from the government over the past 12 years and have a detrimental impact on our employees."

Telstra's response comes after the Australian government developed amendments to the telecom laws mandating that Telstra voluntarily divide up its retail and wholesale networks. The laws would, among other things, pose stricter regulations, force the sale of key assets and prevent them from buying more wireless spectrum--a major growth engine for Telstra.

Australia's Communications Minister Stephen Conroy maintains that the reforms are meant to incite more competition in the wireline broadband market before the NBN is completed. Conroy has asked that Telstra decide what it wants to do by the end of this year.

For more:
- Wall Street Journal has this article

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