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Optus calls for Telstra Split

Optus calls for Telstra Split

Regulation to guide NBN success over next eight years

Optus has today called for the structural separation of Telstra in a response to a government regulatory reform paper.

The telco said “radical reform” is necessary to ensure consumer equity in the National Broadband Network (NBN), and blamed high telecommunications costs on the vertical integration of Telstra.

Optus director of government and corporate affairs Maha Krishnapillai said Telstra will have little incentive to use the NBN if the regulatory regime is unchanged.

“This review provides us with a real opportunity to right the wrongs of the past 12 years by fundamentally reforming the regulatory regime to ensure a better outcome for consumers and ultimately the success of the National Broadband Network,” Krishnapillai said in a statement.

“At the heart of the problem lies the vertical integration of Telstra, an oversight of the 1997 Telecommunications Act which we argue needs to be rectified if we are ever to have true competition in the Australian fixed line market.”

The submission was in response to the government's discussion paper, Regulatory Reform for the 21st Century.

Optus reiterated Organisation for Economic Co-operation and Development statistics that place Australia has the third most expensive broadband in the world, behind Mexico and the Slovak Republic.

Krishnapillai said the telco supports the government's plans to operate the NBN as a wholesale network and its call for regulatory reform.

“It is our view that the NBN’s success will be dependent upon the health of competition over the next eight years as the industry begins to migrate a substantial number of customers across to the new broadband network.

Former Optus executive said in his book, Wired Brown Land, the structural separation of Telstra was not successful during 1996 and 1998 because of the focus on the privatisation and the then government's faith in the Telecommunications Act.

Telstra was contacted for a response.

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