Soft landing on competition? Dream on, says Telstra

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Soft landing on competition? Dream on, says Telstra

Telstra chairman Donald McGauchie has accused some of the telco's rivals of wanting a ‘feather bed’ from the government when it comes to helping them compete in the market.

The feather bed appears to be a reference to the statutory intervention that some NBN bidders are seeking from the federal government before they move forward with a network build.

In an interview with the ABC’s Inside Business program, McGauchie alleged some players that rely on Telstra’s backbone now aren’t competitive even with access pricing at ‘about the lowest [levels] in the world’.

The inference appears to be that if rivals aren't able to compete in today's regular market environment, it does not make sense to potentially prop them up via unnatural forms of market intervention, such as increased regulation or legislation.

All players should be able to stand on their own accord and compete head-to-head under regular market conditions, according to McGauchie.

“They’ve got opportunities to compete and they’ve got access to our network at some of the lowest prices in the world, and they still can’t seriously compete," said McGauchie.

“They keep bleating about us being a monopoly, which of course we’re not.

“[Now] they want the government to give them a feather bed – that’s just not acceptable,” he said.

McGauchie described the proposition of legislated competition as ‘outrageous’ and something he could not imagine any government ‘would even contemplate’.

“We’re happy to compete with anybody,” he said.

“We really enjoy dead serious competition but we want that competition to be not in a legislated form.”

That ‘anybody’ includes the Melbourne NBN consortium Acacia, which counts a number of former Telstra executives among its ranks.

McGauchie, however, could not resist a potshot: “What I’ve seen over the years is that there have been a lot of people at Telstra in the past whose main skill has been getting money out of governments.

“They’ve done that very well but their history would also show that in doing that they have not done the company any good at all and not done a lot of good for the customers.”

He also continued Telstra’s sustained campaign against its NBN rivals to ‘show me the money’ – or at least, reveal the sources of their funding lines.

“In this marketplace, at this time, if there is one thing that people need to know it’s where is the money coming from - what is their capacity to fund something,” said McGauchie.

“Some of the proposals as I think they are will seek to do two things. First of all they seek to transfer the technology risk to the customer and secondly they try to transfer the financial risk to someone else.

“I think we need to be very careful of people who are putting forward [these types of proposals],” McGauchie added.
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