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Howard has each-way bet on Telstra sale timing

Howard has each-way bet on Telstra sale timing

The Prime Minister, John Howard, has moved to allay growing National Party fears the sale of Telstra will go ahead prior to adequate telecommunication service levels being delivered to regional and rural subscribers.

The Prime Minister told ABC Radio in Perth the full sale of Telstra within the current term of government was not yet a forgone conclusion, adding performance levels were yet to be met and a scoping study still needed to be done.

"But if we are to keep alive the option of selling Telstra during this term of government we must do the scoping study now, otherwise time will be against us," Howard said.

"We've said that we will go ahead subject to a number of conditions.

"One of those conditions is that we've got to be satisfied that all the recommendations of the Estens Inquiry in relation to services in the bush are met, or guaranteed to be met," he said.

"We must also be satisfied that the price is good because if the price at which we're likely to be able to sell the remaining interest in Telstra is too low then it is not in the taxpayers interest to go ahead with the sale, so that could affect the timing.

"And of course, we must get the legislation through the parliament." Howard said

One possible reason for the government wanting to be seen to buy time over any proposed sale is the conspicuous lack of any announcement regarding a successor to deposed Telstra CEO Ziggy Switkowski.

A well-placed government source refused to speculate on when any new appointment to the position of Telstra CEO would be made, but conceded it would be "pretty unthinkable" for the telco to launch into a sale without a CEO.

The government's announcement of the forthcoming scoping study has resulted in a frenzy of activity within institutional broking houses and accountancy firms who are all vying for a slice of either the sell-off or the forthcoming scoping study.

Earlier Howard indicated the possibility of lifting Telstra's current foreign ownership cap of 35 percent if that was what was required to raise the $30 billion target.

Corporate regulator the Australian Consumer and Competition Commission has also weighed into the debate, advocating Telstra's wholesale and retail division be split under any full privatization to ensure a competitive marketplace continues.

Expressions of interest to undertake the scoping study to sell off Telstra are anticipated by the end of the year, with a request for tender to follow and selection of advisers to be completed by March, 2005.

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