What's next for the telecoms industry under Labor

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What's next for the telecoms industry under Labor

Independent telecommunications analyst, Paul Budde, looks at how the Labor victory will further develop the broadband policies - and, even more importantly, how they will be executed.

According to Budde this election certainly put broadband on the national agenda, with the subject generating “very heated discussion because the stakes are extremely high”.

“In one way or another some $5 billion worth of direct or indirect government spending is at stake, and who wouldn't want a share of that? All the signs indicate that the new government is willing to sit down with the industry and discuss how to proceed from here,” said Budde.

He believes broad outlines of the plans are in place and there is general agreement between the new government and most players in the industry - and, importantly, there is room for discussion.

”The industry should be able to harness this unique level of goodwill and use it to the advantage of, not just the industry, but of the whole country. Again, there is broad agreement that the best solution for the country is also the best solution for the industry,” he said.

According to Budde high on the industry agenda is a high-level FttH vision and the industry will shortly present the new Minister, Stephen Conroy, with an “industry vision”.

“This has been developed over the last month and will include ideas and suggestions for an infrastructure that supports e-health applications (video monitoring of patients, elderly people, remote diagnostics); smart grid (linking the electricity network to broadband, allowing utilities and their customers to save energy); and tele-education - as well as e-entertainment, of course,” he said.

However Budde says it will be very interesting to see if Telstra is prepared to play ball.

“This would mean the incumbent accepting the new government's open networks concept and genuinely working with the government and the industry towards solutions that are good for the country, for competition and for innovation. That would be a massive turnaround for Telstra,” said Budde.

Although he believes the situation could be worse if Telstra doesn’t play ball with the Rudd Government.

“We can expect all-out war - a war even bigger than the one it waged under the previous administration. This will make it extremely difficult for the Labor government to speedily implement their plans. In the worst case scenario it could take it three years to execute its FttN plan,” he said.

According to Budde this could be disastrous for the government and would reflect badly on a policy that was a major part of its campaign. Ministers and bureaucrats would be dragged through the courts as Telstra is expected to continue to try to hold onto its monopoly.

”Nothing less than very, very tough structural separation legislation will ensure Labor's capacity to execute its plans under such a scenario, but even this could take at least a year, which would again undermine Labor's promise to start rolling out in 2008,” he said.

Budde says there is still a reasonable chance that Telstra will pre-empt all of this and announce its own structural separation, since this could be most financially lucrative for the management team. But to date they have indicated that they prefer a vertically-integrated future.

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