Trujillo slams govt in fibre tirade

Trujillo slams govt in fibre tirade

Summary: Telstra CEO Sol Trujillo has slammed the federal government's decision to award funding to Telstra competitor OPEL for a new national broadband network, decrying Australia as a nation that lacks any incentive for investment in telecommunications.

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Telstra CEO Sol Trujillo has slammed the federal government's decision to award funding to Telstra competitor OPEL for a new national broadband network, decrying Australia as a nation that lacks any incentive for investment in telecommunications.

In a plaintive cry to a conference room of AIIA members in Sydney, Trujillo also railed against competition regulator ACCC over its insistence on placing market controls on the wholesale prices Telstra charges for competitors to access its network.

In his speech, Trujillo accused successive Australian governments of spending billions of "taxpayer" dollars "in the wrong places" and "adopting the wrong policies" toward ICT growth.

It was the "other inconvenient truth", he said, that government inaction and incompetency was behind Australia's poor ICT record.

"Giving away a billion dollars to the Singtel/Elders OPEL joint venture won't deliver Australia a fixed high-speed broadband network for consumers," he said.

The OPEL proposal, he said, is based on technologies (ADSL, WiMAX) that have limited capacity for scaling up to meet future needs. "Its old stuff", he said.

Trujillo emphasised, repeatedly, that Telstra is an Australian company, with Australian shareholders and employees (himself the exception that proves the rule), while going to equal pains to describe Singtel/Optus as a foreign competitor that invests more in places like Pakistan and India than Australia.

"What I have a problem with is when the Australian Government takes your taxpayer money and sends it to [Optus/Singtel] and says now come and compete," he said. "Your taxpayer money is going to Singapore. It doesn't help."

Trujillo blamed "political considerations" for Australia's poor rankings when it comes to price and performance of fixed line broadband, and even decried the lack of Australian companies listed on the NASDAQ.

Over-regulation, he said, is to blame.

"It is in fixed line residential services that government regulation is at its most constrictive and Australia lags behind the rest of the world," he said.

"Governments don't operate like markets. They can't, and they shouldn't try. It is the role of the government to make the policy settings favourable to investment. Investment will only be made when there is a competitive rate of return to be earned. That's how free markets work."

Trujillo said that Singtel/Optus has until recently had little incentive to fully utilise the network infrastructure it has built in Australia, nor the incentive to build a better one, as access to Telstra's Unbundled Local Loop (ULL) has been regulated at such a low price.

"Thanks to the ACCC's pricing model, it is literally cheaper for Singtel/Optus to resell Telstra's network rather than using their own cable network which they built themselves," he complained. "Why would you invest when the regulator allows you to get access to the same service for below cost?"

Trujillo used international comparisons to justify why Telstra should charge more to competitors for wholesale access. Canada's wholesale prices are 75 percent higher than Australia, he said, despite having as equally harsh barriers in terms of low population density and great distances.

"It's not logical," he said. "When we look at this issue of pricing versus costing and the way the regulatory framework has worked here, it is a bit perverse."

Price shouldn't be a consideration, he said, as much as a carrier's ability to deliver services. "It is nice to have debates about prices," he said. "But if you have no services to price, it doesn't matter."

Trujillo championed Telstra's Next G wireless network, built in 10 months without any government incentive.

"We built this network not by platitudes, not by press releases, not by committee, and clearly not with government money," he said, having a stab at the G9 group that continually rallies against the carrier.

"We don't look for government hand-outs and government subsidies, because we don't need them," he said. "We believe in letting the market work. We don't need bureaucratic interference. We just need a simple thing -- the freedom to operate in a true market environment."

During question time, a member of the Competitive Carriers Coalition pointed out to Trujillo that Telstra has in fact received something in the order of 80 percent of government telecommunications handouts between 1996 and 2006.

The question: "Are you then accepting that it was wasted money to give that to Telstra?"

Trujillo excused himself as not being on the scene during this period, and said that none of this money was spent with long-term vision in mind.

Broadband: Like Sydney's traffic woes
Trujillo's analogy during his entire speech attempted to play on his Sydney audiences' frustrations over the state of their local public transport and roads.

If the government had taken a smarter approach to public transport infrastructure 10 years ago, he said, Sydney wouldn't have so many traffic jams or such atrocious public transport. It would be like it was during the 2000 Olympics (when Sydneysiders decided not to drive and public transport services were increased), or like Tokyo's high-speed rail network.

Australia has the same challenge now, he said, in terms of building a national broadband infrastructure that can underpin future economic growth.

"It is crucial that individuals like you speak out," he pleaded with the audience. "It is decision time. Every day of the lag and inaction on a broadband policy starts building a millstone around the neck of Australia's future."

Topics: Broadband, Networking, Telcos, Optus, Telstra, NBN

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26 comments
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  • Trujillo dummy spit slams govt

    You need to go back to school and learn the difference between "Rallied" and "Railed". Then, perhaps, you could use the correct word in the correct place
    anonymous
  • Here's your dummy Telstra

    Now let's cry those tears Telstra and give you a pat on the head and a cookie, so you can continue on your merry way overcharging every person who uses your service, and providing crap broadband plans. But please continue to sook that you need to raise prices, as your profit last year was ONLY $3.18 billion dollars. How is Telstra surviving on such little money?
    anonymous
  • Trujillo dummy spit slams govt

    Rod needs to write better speeches for industry comments you'd think. All I hear is "wah wah wah".
    anonymous
  • Makes you wonder

    Telstra play a dirty game. Over the last few days I have been trying to get adsl2+ My ISP say that the Telstra database shows I cant have asdl2+. But when I called bigpond, yes sir we can provide you with adsl2+. Seems to me Telstra isnt playing a fair game. They are like a stupid child who wasnt picked to play.
    anonymous
  • Testing, what testing?

    This is awesome - "Trujillo championed Telstra's Next G wireless network, built in 10 months without any government incentive." Championed? Yep, Sol built it himself, he programmed the software, he built equipment he even hauled the towers into the air. No, what Sol did do, was push an untested technology out the door to reap as much profit as humanly possible while customers went mental dealing with poor service, poor software and support that didnt even know the product has arrived. Sol stop bitching and moaning, in fact, with your bonus for staff culling this year, you should be stoked!
    anonymous
  • BigPond is a disagrace

    Sol,

    Improve the existing network to a reasonable performance (e.g. increase cable upload speeds from the pathetic 256Kbps to something more reasonable e.g. 5Mbps) and charge more reasonable rates and you might get some sympathy. Until then, you're bleating into the wind my friend.
    anonymous
  • It's about a good deal for all Australians

    "Trujillo championed Telstra's Next G wireless network, built in 10 months without any government incentive."

    Um, yes, tried to access this for a reasonable amount of data, you will need to take our a mortgage to pay for it. Reality is the cost of accessing data on this network makes it prohibitive for more than just casual use. That's also what Telstra would deliver us for the FTTH network. Something that would be too expensive for practical or consuler use. Roll on competition and praise the ACCC for trying to get a fair deal for all Australians, not just the rich.

    Sol was right about one aspect however, the government has really played no useful part in Australia's broadband strategy, it has no vision and no plan, other than to get re-elected at the end of the year.

    Rob.
    anonymous
  • Ha!

    Overheard in the foyer before the speech.

    "So Rod, a lot of people come to hear the big man speak!"

    Rod - "Yeah, lets just hope the speech is good enough.."
    anonymous
  • Very Insightful

    Cock off, you grammatical dullard.
    anonymous
  • REJECT DELUSIONS the answer

    Why do people use BigPond?

    The last week I have been trying to get adsl2 for some reason my ISP cant provide it. I have talked to BigPond and its amazing they can provide it on my line. People use Bigpond and Telstra services because they cornered into it. If its choice to have or not have adsl2 I will do without if my only choice is bigpond. I will be making a formal complaint to the TIO about Telstra and my ISP as I feel its the only way to get to the truth.
    anonymous
  • Sydney the Telstra Evangelist

    Sydney Lawrence writes: "I ask, if the services offered by Telstra are so inferior to those offered by Telstra's opponents how is it that Telstra remains No1 with the Australian public."

    Mr Lawrence,

    Telstra remains in such a good market position because:

    a) it holds a near total monopoly in rural/regional Australia.

    b) non-technical users do not research their options properly and trust Telstra to do the right thing.

    c) they use government funding for projects to prop up their bottom line

    d) they overcharge on every service they can legally get away with (and sometimes illegally)

    Please Mr Lawrence, stop hiding behind the simple fact that you have a financial interest in Telstra and will do anything to see your shares produce a fat return. It's really quite disgusting and offensive to be perfectly honest.
    anonymous
  • You're deluded

    You're deluded if you think Telstra got to be No. 1 by competing fairly, or even competing. Until 15-odd years ago, they had NO competition at all.
    Sol Trujillo is crying big crocodile tears because the govt. is weaning him off their giant teat.
    Maybe now that they aren't being given their food, they'll learn to hunt.
    anonymous
  • Oh Sol you

    Trujillo emphasised, repeatedly, that Telstra is an Australian company, with Australian shareholders and employees

    - This is what his employees really think of him and his organisation.
    http://forums.whirlpool.net.au/forum-replies.cfm?t=789249

    Trujillo championed Telstra's Next G wireless network, built in 10 months without any government incentive.

    - Why didn't Sol mention the Titan network infrastructure works that was delivered recently by Alcatel-Lucent with a sub-set of the promised features????
    anonymous
  • Trujillo - Go back to playing bass for Metallica

    The subject is a little joke (I'm hilarious), but you all should know why I'm feeling jovial:
    Sol Trujillo is pissed off! Maybe now, he knows how his customers feel!
    anonymous
  • The rich?

    The rich hate Sol too. Shareholders hate him. His employees hate him. John Howard hates him. I can't imagine Kevin Rudd being a fan...
    If anyone can point out to me one person who likes and respects Sol Trujillo (who wasn't one of his US cronies), they get a free elephant.
    anonymous
  • He looks like & acts like Hitler

    He is in some aspects like hitler for one he looks like an older version of him & he acts like him in the fact that there both total morons.

    Sol treat your customers well and you reap the benefits treat them badly and they look elsewhere.
    People only go with telstra if they are not informed or are not in the know. If telstra shareholders & employees really don't like him they should band together to get rid of him. The shareholders have ultimate control over the company so get enough shareholders and employees and presto his gone.
    anonymous
  • Sol thinks like Queen

    Sol sings to himself in the bathroom:

    I'm a man with a one track mind
    So much to do in one lifetime (people do you hear me)
    Not a man for compromise and where's and why's and living lies
    So I'm living it all, yes I'm living it all
    And I'm giving it all, and I'm giving it all
    Oooh oh yeah yeah - ha ha ha ha ha
    Yeah yeah yeah yeaaah
    I want it all

    Sol, your living it and giving it now learn how to take it.
    anonymous
  • Sol go home

    Sol, Go back to the states and stop howling when things don't go your way.

    The simple fact is Telstra is a criminal organisation in it's charging practises. It has held this nation back and taken advantage of the elderly and novice internet users.

    Telstra needs to be split up and controlled. It can not continue the way it is going, Sol is a classic example of greed, everything for the bottom line which is in reality his back pocket.
    anonymous
  • Sol

    We live in a global community Sol not under a Telstra monopoly. The good old days are over.
    anonymous
  • Green and jealous

    Ben jealousy really is a curse hey.
    anonymous