Competitors overjoyed by the breakup of Telstra

With the share value of Telstra dropping the recent announcement by the government of a forced structural breakup of the Australian telecommunications giants has led to competitors and consumer groups praising the decision.

The splitting up of Telstra with the goals of generating benefits to consumers and higher levels of competition is the main aim of this reform and will include new performance benchmarks according to a statement from Stephen Conroy, the Communications Minister, and this has been applauded by most of Telstra’s competitors.

Ravi Bhatia, the chief executive for Primus Telecom said ”Every minister since Kim Beazley has been bamboozled or prevented from reforming the telecommunications industry in Australia.”

Once the changes take place ”it’s going to be hugely beneficial to the competition” predicted Mr Bhatia.

He went on to add ”If you look at the way the rules for competition were drafted in July 1997, although we had competition, our hands were tied because we couldn’t get the right terms and conditions and prices because Telstra was simply too big and owned everything.”

Many service companies like Primus were seemingly forced to buy services that “seemed to have inferior reliability and inferior pricing” from Telstra, while at the same time customer service in Australian telecommunications seemed to be falling short said Bhatia.

He advised ”In relation to pricing disputes – and there were a lot of them – between companies like us and Telstra, it took years to resolve them.”

A great many services would now be made possible with the announcement of these new changes for Telstra and this could include pay TV, cheaper broadband and perhaps even mobile phone services said Bhatia.

He said ”The next step is execution of this legislation. ‘Let’s keep going and get it done.”

Source – SMH