The Australian government says it aims to pass a bill forcing structural separation on Telstra by the end of the year.
Telstra and its major shareholders have called on the government to delay the bill until after they have reached agreement on Telstra’s part in the national broadband network (NBN).
But communications minister Stephen Conroy told an industry conference yesterday that the government was “”absolutely committed” to passing the legislation by the end of this year.
Conroy last month announced a series of regulatory reforms aimed at enforcing the functional separation of Telstra if the former state-owned operator refused to voluntarily separate.
Telstra would be forced to conduct its retail and wholesale operations at arms length, divest its 50% stake in cable TV operator Foxtel and be barred from acquiring additional mobile broadband spectrum.
Conroy denied that the bill could wipe out shareholder value. “Bloomberg analysis found that out of 17 brokers who cover Telstra, 11 recommended a ‘buy’ and only three recommended investors ‘sell’. This suggests that many in the market also see a ‘win-win’ outcome is possible,” Conroy said.
Telstra group managing director Geoff Booth on Tuesday told a Senate Committee the operator was opposed to the proposed legislation in the current form.
Booth said the bill would “reduce competition, harm consumers, provide the ACCC with expanded powers unparalleled in any other industry and destroy value for [Telstra shareholders].
“Telstra will continue to talk with the Government, but we cannot agree to proposals that fail to give fair value to our shareholders,” he said.