Privatisation of Telstra

A detailed Summary of Privatisation of Telstra

What are the advantages of privatising Telstra and how does this impact it's ethical conduct while striving to satisfy community expectations?

I believe that putting important public assets into select private hands is not in Australia's long-term interests, and oppose the partial/full sale of Telstra for the reasons that the Government has given.

The argument the Government has given for the privatisation and corporatisation of Telstra has been a budget conscious one where the proceeds of Telstra will provide a "one-off" opportunity to:

1) abolish Telstra's pastoral call rate and provide untimed local calls in extended zones in remote Australia;

2) increase funding for Networking the nation; and

3) pay off foreign debt left over by the previous government

However, this is not true as the Minister, Senator Alston already has the power to direct Telstra to provide services and upgrade infrastructure (points 1 and 2). If the USO (Universal Service Obligations Act) or performance standards under the CSG need changing, then the Minister should invoke his power to direct, and these changes should be made distinct from any attempts to sell Telstra.

Statistics also show that the sale of the first third netted a total

The Democrats and the Labor Party also disapprove of the privatisation of Telstra for the above reasons.

The 3rd competition notice, received on the 25/1/99 alleged that Telstra discourages competition by forcing other carriers wanting to transfer customers to Telstra to use a manual process that is inefficient and Cumbersome. Finally, the 4th notice alleged that the package of conduct that is continuing, along with the price charged by Telstra for the churn, is cumulatively a breach of the competition rule by Telstra. If found to have breached the competition rule, Telstra is liable for significant penalties of up to $10 million or more for each offence.

This deterioration in services has been a direct consequence of privatisation, where the focus of the company has shifted to profits rather than providing a cheap and efficient service. Another example of this can be seen when according to the Media (ABC), Telstra reaches an excess of funds of up to $1.5 billion as a result of staff/service cuts. The Board of Directors are urging for a special dividend to shareholders or a share buyback (to increase share prices). No one is suggesting the obvious, strategic investment.

To date, ACCC (The Australian Competition and Consumer Commission) has issued 4 notices against Telstra in respect of the "commercial churn" transfer process, alleging that Telstra's conduct is anti-competitive. Telstra's competitors have complained that Telstra has used it's near-monopoly powers to restrict local and long-distance customers transferring to other providers and that this inhibits the ability of telecommunications customers to enjoy the benefits of a more competitive environment. The ACCC instituted proceedings in respect to 2 of the notices in Federal Court on December 24th.

Some common words found in the essay are:
USO CSO, , Board Directors, Statutory Body, Union CEPU, Pay TV, Cumbersome Finally, Consumer Commission, Optus Vodaphone, China Indo-China, sale telstra, public ownership, service obligations, community service obligations, competition rule, private hands, price caps, telstra reasons, rule telstra, telstra provide, competition rule telstra, local calls,

Approximate Word count = 1655
Approximate Pages = 7 (250 words per page double spaced)

Category: Miscellaneous