Optus chief: Telstra split not communist

The government's plan to split Telstra is not communist, Optus chief Paul O'Sullivan said today, because Telstra was not a normal company.

At a Sydney business lunch today, O'Sullivan said that while some observers feared the government's plan to split Telstra was "the beginning of some red revolution", Telstra needed to be treated differently. "Telstra's relationship to its fixed line assets is not the same as a normal Australian company," said O'Sullivan.

He defended the position on the grounds that Telstra was handed its copper network by Australian taxpayers, and that its creation under the Telecommunications Act was meant to aid competition, for example, by giving access to that network to competitors.

"It's quite different to companies that build their assets from the ground up," he said, and later added that "Telstra's shareholders should not be surprised that separation is now on the cards."

He noted that analysts were still recommending a "buy" for Telstra and that they believed it was undervalued at its current price of around $3.45.

Optus has run a sustained campaign which has backed almost entirely the Labor Government's plans to build the NBN, but more importantly to separate its largest competitor. The legislation will not be debated in parliament until 2010; however, O'Sullivan still urged the country to get on with it.

"The reality is that the National Broadband Network is 'do or die' for competition in telecommunications," said O'Sullivan, concerned that the legislation which would clear the way for Telstra's break-up had been bogged down by politics.

"I am very concerned that the debate on the NBN is getting stuck — stuck as debate rages between different sides of politics; stuck as to what to do or what model to take, as the politicians argue and as Telstra capitalises on that to encourage further delay."

Despite the NBN Co having already commenced construction in Tasmania, O'Sullivan said, "It's time to stop the politics and time to start building the NBN."

The Optus chief said any deal between the NBN Co and Telstra should not be privately negotiated. "We think it's critical that Telstra is not allowed to do a backroom deal free from visibility, transparency and accountability to the Australian public. Telstra must not be allowed to escape from parliamentary oversight."