'

Telstra stands its ground

commentary Telstra broadband and mobile competitors beware. The telecommunications heavyweight plans to give you a rough ride into the end of this year and beyond, almost to the point of daring competition regulators to step in.

commentary Telstra broadband and mobile competitors beware. The telecommunications heavyweight plans to give you a rough ride into the end of this year and beyond, almost to the point of daring competition regulators to step in.

Telstra's chief executive officer, Ziggy Switkowski -- no doubt in an ebullient mood due to the coalition government's just-confirmed Senate dominance, paving the way for the sale of the remainder of the carrier -- placed his rivals on notice in a speech at the company's annual general meeting in Melbourne last week.

Switkowski described competition in the broadband and mobile markets in particular as "white hot," adding that "this Christmas season ahead promises to be great for consumers and very demanding for services providers such as Telstra -- but probably even more so for our competitors.

"We will not be taking a step backwards in striving to win in the marketplace and being innovative, creative and competitive in all our dealings with customers".

The chief executive officer also reaffirmed his point last year that "it was not acceptable" that the telecommunications heavyweight be "expected to concede market share year in year out.

"In the crucial businesses of mobiles and broadband, our market shares are at least holding," he added.

The tone of Switkowski's remarks reiterates the telecommunications carrier's desire to hold a strong line against Graeme Samuel's Australian Competition and Consumer Commission, which declined in July to lift a competition notice originally issued in March over deep retail broadband pricing cuts made by Telstra. The competition watchdog has the option of taking Telstra to court in a move which could see the telecommunications carrier forced to cough up millions of dollars worth of fines and face civil action from rivals.

There is little doubt of the truth of Switkowski's comments about "white-hot" competition in both markets at the moment. A quick scan of broadband community user Web site Whirlpool today revealed a frenzy of activity from companies such as Exetel, which is offering a 1.5 Mbit/s ADSL plan with 500MB usage for AU$25 per month, while Optus said it would offer broadband free for four months under a just-released bundling plan (although there are some fairly tough conditions). On the mobile pricing front, a Christmas battle is underway with Hutchison, Vodafone and Optus all using AU$79 capped plans to retain customers as Telstra examines its capped mobile plan options.

With the remainder of Telstra up for sale and the Senate expected to prove compliant, the board and management team face plenty of pressure to ensure that rivals do not cut too deeply into the telecommunications heavyweight's share of key new-generation markets and threaten its value. There is already intense regulatory pressure on the carrier over its broadband pricing move -- it will be interesting to see what stance it takes should it face bolder discounting in the mobile arena. For the customer shopping for deals, there should be some crackers released between now and 25 December.

Are you planning to purchase broadband or mobile services between now and Christmas? What is the longer-term outlook for the two sectors?