The Competitive Carriers Coalition (CCC) wants the new Labor government to confront Telstra over its monopolistic position in the telco market and introduce structural reform.
The CCC, which represents "non-dominant" telcos in Australia, such as Primus, Hutchison, PowerTel and Macquarie, reckons prices that Australians face for telecommunication services are too high due to Telstra's stranglehold over infrastructure.
"Australia's telecommunications prices are not competitive, we pay more than just about every other country in the OECD for basic services," said David Forman, executive director of the CCC.
"Around the world, other developed countries are moving quickly to implement a new wave of competition reform, which means Australia risks falling even further behind in the next few years -- unless we act now," he said.
Forman accused Telstra of exploiting weaknesses in the current regulatory framework to stifle competition and "lock in monopoly profit margins", resulting in a lack of momentum in Australia's telco industry and the real possibility of driving up inflation.
He told ZDNet Australia that "there's no question that the exploitation of weaknesses in the regulatory regime has been used more aggressively and more publicly under Sol Trujillo."
According to the CCC, Labor must issue an ultimatum to Telstra, offering it the option of voluntary functional separation, or being forced into a structural separation by regulators -- a model for reform employed by both the UK and New Zealand.
Forman was optimistic about Labor's approach to restructuring the telco industry, and said that Stephen Conroy, Labor's spokesperson for Communications, had so far impressed him with his commitment to reform.
He said that Conroy was on record as saying that he wanted a functional separation of Telstra at least as strict as the one imposed on BT in the UK.
"What Conroy's said up to this point is a pretty clear statement of intent, so we've taken a lot of heart from that," said Forman.