Telstra’s future
Telstra’s group managing director for public policy, Dr Phil Burgess, arrived in Kalgoorlie-Boulder this evening for a flying visit. He came straight from the airport to a private dinner with business and community representatives at the Cornwall Hotel.
I was pleased to be among the small group of a dozen people. It’s not often you get to meet one of the most influential businessmen in the country.
Burgess is one of the “Three Amigos†who came to Australia in July 2005 with the new management team headed by Telstra CEO Sol Trujillo.
I thought the meeting was going to be off the record, so I didn’t take my notebook or camera. Bad journalist! Burgess said over drinks on his arrival that he doesn’t believe there is any such thing as “off the record” in Australia. He has heard it said, he reckons, and then read his words the next day.
Not that he’s any stranger to the media. Burgess has been the hard hitter for Telstra in its running campaign against government regulation.
I’m writing this article less than two hours after the meeting finished, and I’m paraphrasing some of the key points.
- Telstra is committed to increasing value for its shareholders and improving service for its customers;
- The Howard Government, especially former Communications Minister Helen Coonan, over-regulated the sector;
- Highly critical of the $1 billion handout to the Singapore Government (Optus) to replicate a phone network with inferior technology (WiMax) which he claimed would disadvantage regional areas;
- Welcomed the election of the Rudd Labor Government. Trujillo had private talks with Rudd about three months before the election;
- Broadband speed in regional areas (Kalgoorlie, population 30,000) could be increased to more than 40 megabytes per second within four years under Labor if they make spending decisions within six months;
- Telstra’s NextG network is a world leader in mobile internet technology;
- Google, Microsoft and Yahoo pose a bigger commercial threat than Optus;
- The Australian media was silent on the Howard Government’s broadband policy failure.
- Broadband offers tremendous potential benefits for regional Australia in health and education.
- Competition in the broadband space will be in applications, not the pipe (”the coat hangers, not the rod”).
I’ve been critical of Telstra in the past, but increasingly I’ve come to accept the government is at fault for most of the failings that exist in telecommunications.
While I believe it’s reasonable to regulate for a universal service obligation, the government should fund the delivery of that obligation.
Burgess was highly critical of the Howard Government’s approach while it held a majority shareholding. He said the company was hamstrung in its operations.
For instance, the government dictated who should be on the board and where pay phones should be located, while at the same time insisting that competitors have access to Telstra’s infrastructure.
Telstra has invested heavily in NextG because it’s an unregulated environment.
I agreed with most of the arguments. I thought it slightly contradictory though that Dr Burgess was appealing for Australians to support Telstra in the national interest on one hand, while trumpeting the increased foreign ownership of the company on another (up to 19 percent, I think he said) and urging a fight against Google, etc as well.
I guess it was a populist pitch.
My view is the government should regulate for minimum telephony and internet standards across the country and fund companies to deliver those services where they are not economically viable, using a tender system.
Aside from that, I support deregulation of telecommunications and unfettered competition. In that respect I broadly agreed with what Burgess had to say.
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Tags: finance, Kalgoorlie, Technology, Telstra, Western-Australia
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