Telstra has too many bosses. It has the Commonwealth government and through them the electorate, it has its shareholders, a group which includes nearly every Telstra employee. It has the Australian Competition and Consumer Commission, the Australian Communications Authority, and it has its customers. Then there is the industry self-regulation, the Telecommunications Ombudsman, the Australian Communications Industry Forum and the Telecommunications Access Forum. The net result is that Telstra shares will continue in the doldrums. Investors know that Telstra is being pulled in too many directions, serving too many interests. It is time that Telstra was set free to perform.
The nearer Telstra comes to full privatisation the higher the price demanded by the hold-outs, in particular the rural voters. Like the proverbial widow sitting in the last house needed by the property developer there comes a time when the premium price is withdrawn, the developer gives up, or goes ahead without it. There is a shopping centre at Caloundra in Queensland's Sunshine Coast where a little old house sits right in the middle of a shopping centre car park. Presumably, the owner held out for more money, or just the fear of leaving home, and when the developer could wait no longer, the shopping centre went ahead anyway, complete with a house marooned in a sea of cars and shopping trolleys.
When the time comes you can be sure the beneficiaries of the estate will not reap a premium on the house. Who would buy it, what rent would it command? Are the hold-outs of the Telstra sale running the same risk as the shopping centre widow? Will the desire to regulate and press further obligations on Telstra make it less worth selling and, more important, a less valuable corporation?
The failure to sell Telstra will create the worst possible economic and social outcome. An inefficient Telstra burdened by increasing Community Service Obligations, a poor return with millions of dissatisfied shareholder-voters, a declining return to government and a weak international competitor with no capacity to raise capital from its principal shareholder.
Some of the old arguments for both keeping and for selling Telstra are looking shop-soiled. The favourite of the "sellers" is that the government could retire debt. The government no longer has a debt problem. Previous asset sales like the first two tranches of Telstra and the Commonwealth Bank and Qantas and CSL and so on, took care of that. The favourite of the "retainers" is that Telstra is a monopoly and could not be sold as a monopoly. It now seems clear that is no longer so. Competition in the sector is fierce, there are over 40 carriers in the market and some have been unable to survive the competition. The real debate about the sale of Telstra is what is best for Telstra as a telecommunications company. Not Telstra as a government entity, or a milch cow for the revenues, or as an asset to be realised, or as the saviour of rural Australia, or as the third favourite demon of the regulators after big oil and big banks. No, just Telstra, Australia's biggest company. The company being frigged about by every Tom, Dick or Harry who wants a bit of payback against anything big and bountiful. Governments have to stop mimicking current affairs programs, playing the role of "protecting the little Aussie bleeder". Australians are extraordinarily well protected in the telecommunications market. But its time to let Telstra perform without the hobbles.
The regulation of the telecommunications sector is extraordinarily far-reaching. There is a clear universal service obligation to ensure that standard telephone services and payphones are reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business. There is continued access to untimed local calls. There is the customer service guarantee. There are special benefits for rural and regional customers of carriage service providers. There is a price-cap regime. There is a regulatory structure designed to stimulate competition.
The latest report of the ACA on the performance of the major telecommunications carriers demonstrates the very detailed scrutiny under which carriers perform. There are measurements of how well Telstra performs in making new connections, in fault clearance, and for all mobile networks, call congestion and call drop-out rates. Call centre performance and mobile number portability is measured for all carriers.
For those worried about foreign ownership there are restrictions on aggregate foreign ownership to a 35% ownership stake in Telstra; and restrictions on individual foreign ownership to a 5% ownership stake. Telstra's head office, base of operations and incorporation by law, must remain in Australia and its Chairman and the majority of its directors are Australian citizens.
And there's more! Telstra and all other licensed telecommunications carriers are required under the Telecommunications Act 1997 to produce industry development plans for the development in Australia of industries involved in the manufacture, development and supply of facilities relating to carrier business; and research and development activities relating to such industries.
The policy aim in telecommunications is clear, it was set out five years ago when the APEC Telecommunications Ministers endorsed a Fully Liberalised Telecommunications Services Sector. Users should have a choice of suppliers. Suppliers should be able to extend their business activity without restrictions on entering the market. Suppliers and users should be able to benefit from a full range of competitive safeguards that would ensure non-discriminatory treatment of service providers and users. Investors should have confidence to invest in the telecommunications industry and in companies reliant on telecommunications services. Governments should have clearly defined responsibility to provide for transparent and non-discriminatory policy arrangements to meet the needs of their economies and provide for a full range of consumer protection measures.
Each of the elements of a liberalised telecommunications system in Australia is in place, including all the regulation required to ensure competition and fairness. The debate over Telstra is no longer about the shape of the regulatory system, it is about Telstra the company. It should be left alone to perform to its best.
No comments:
Post a Comment