Telstra "banging its shoe" on regulation: Budde

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Telstra "banging its shoe" on regulation: Budde

Telstra has used an overseas speech by one of its executives to lobby the Federal Government to give the telco a freer hand to control access to its network.

But telecoms analyst Paul Budde told iTnews that Telstra was "fighting a losing battle" if it sought to continue being a vertically integrated telco while calling for less government regulation.

He cited US President Barack Obama's push for open networks as proof that Telstra was swimming against the global tide.

Telstra’s general counsel, Will Irving, speaking at the Corporate Counsel World Summit in Vancouver, Canada, said the global financial crisis should spur world governments, including Australia's, to provide "regulatory certainty" to incumbent telcos.

He said competition laws needed to change swiftly to remove roadblocks to investment and create jobs.

“With investors and lenders now requiring bullet-proof business plans, new infrastructure projects require regulatory certainty up front for the life of the investment,” Irving said.

“Regulated access at below-cost rates, such as we have in the Australian telecommunications industry, hinders new investment."

He criticised the three-year horizon applied to access pricing of new investment as being too short: "[It] simply does not allow long-term investments in what are risky infrastructure assets from the perspective of lenders and investors".

Irving also criticised competition models built around "low regulated input costs and readily available credit" as unsustainable.

He said the time of ever-increasing asset prices offsetting low regulated operating returns was over: “Governments and regulators need to realise this and focus on doing what they can to encourage private sector investment or face the potential consequences of years of under-investment."

But Budde said the financial crisis showed that "hands-off approaches are not always the best" solution.

He called on Telstra to adopt a collegiate and conciliatory approach to dealing with the industry rather "banging its shoe on the table" and always demanding its own way.

"While I understand the issues Irving is talking about, Telstra has created a situation where no one trusts them any more," Budde said.

A change of leadership at Telstra may lead to a more open culture, he said.

Only when Telstra agreed to divest itself of its network as a separate entity could its push be justified, he said.

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