Telstra Shrugs?

Peter Cresswell's picture
Submitted by Peter Cresswell on Sun, 2006-05-21 02:47

Who said this, and about what: “Those who risk capital to earn returns shouldn't have to subsidise those that don't.”

If I told you that the subject of the comment was telecommunications, you might think it was a comment from a disgruntled Telecom-NZ shareholder. It wasn't. It was said by Telstra's chief executive Sol Trujillo who, eleven months into his job, is resisting 'unbundling' of his company's Australian broadband network and calling instead for deregulation.

Australia needs a fast, modern telecoms infrastructure [says Trujillo]. And the quickest way to get there is to allow unfettered competition. Mr Trujillo says that America and Europe learned long ago that “to foster competition the government cannot control the levers, it must let the market work. Virtually every other country has moved towards less regulation in telecoms."

For "virtually every other country" read virtually every other country but our own authoritarian backwater, where a very different story is told by the various hyenas slavering to pick over Telecom's bones. Trujillo, a Mexican free-marketeer from way back apparently -- where he would undoubtedly have seen first hand what nationalisation looks like -- is adamant that Telstra's rivals not get something for nothing, and is resisting being forced to grant access to Telstra's proposed $3 billion broadband fibre network to its competitors. Says The Economist:

Worried that giving rivals a free ride would undermine his profits, Mr Trujillo is threatening not to lay the fibre: “My duty is to our shareholders—including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”

Good for him. Spineless Telecom executives might have something to learn from Trujillo's righteous truculence.

LINKS: Face Value: Calling Canberra - Economist

LINKS: Politics-Australian, Politics-NZ, Economics

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