Telstra blasts bid to block Sensis offshoring

Telstra is railing against a proposal to force its Sensis division to produce directories in Australia, arguing the plan would increase costs and disadvantage it compared to offshore rivals.

The telco provided its submission late Friday to a Senate Committee that is tasked with examining an eleventh-hour bid to prevent Telstra from offshoring production of its phone directories.

The proposal before the committee is to impose a carrier licensing condition on Telstra that requires all directory production work to occur on Australian shores.

Telstra is already subject to an existing license condition that forces it to produce the White Pages directory.

Telstra argues the proposed "expanded license condition" over-steps its existing obligations by adding "a requirement for Telstra to produce online directories" and also by covering directories — namely the Yellow Pages — that are produced "commercially and independently of the current license condition applicable to Telstra".

The carrier also argues there is "no apparent net benefit" in forcing production work to stay in Australia, and that any such move would encumber Telstra with costs that its mostly online-based rivals in the directories business don't face.

"Expanding the scope of the license condition and adding an onshore employment condition would raise Telstra's costs, which would have to be passed on to Sensis' customers (largely small to medium businesses)," Telstra noted. (pdf)

"The license condition could impact on not just the printing of directories, but potentially all work in relation to producing directories, including sales operations and call centres, design and layout, and software and other IT services".

It added: "A higher cost structure will undermine Telstra's ability to meet its existing print directory license condition (which requires the production of an essential service to consumers without regular access to the internet) and to compete in the directories/search market".

Telstra described competition in the directories space as "vigorous", "aggressive" and "highly contested", and said existing business models are "under pressure".

The carrier said imposing a licensing condition on it would "distort competition". It also believed it was being singled out unfairly against a backdrop of other industries that had also turned to offshoring.

"If offshore production is of itself a 'problem', then countless other industries suffer the same problem," Telstra said.

"It is unclear why offshore production of directories is particularly a problem".

The Department of Broadband, Communications and the Digital Economy (DBCDE) earlier raised concerns with the proposal before the Senate.

Likewise the Department of Foreign Affairs and Trade (DFAT) is warning that the proposal could put Australia in breach of its obligations under fair trade agreements (FTAs).

Several unions have come out in support of the proposal, which is rooted in a bid by the Greens to save hundreds of jobs under threat at Sensis.