In recent weeks, this site has focused a great deal on the situation with Telstra in Australia. It’s because this drama has so many dimensions worth analyzing. A key development was the court ruling against Telstra on the improper use of Optus client information. Telstra used information it had access to as wholesale service provider to assist its own retail unit in targetting Optus customers.
These smaller developments are contributing to what is going to be a very dramatic overhaul of telecommunications policy down under.
Optus Chief Paul O’Sullivan on why he thinks Telstra will try to delay roll-out of the new broadband network proposed by the Government:
“The incentives for Telstra to delay a roll-out of a new high-speed broadband network or to try to re-monopolise a high-speed broadband network remains,” he said.
“The fundamental drivers of most companies’ behaviour lie in their underlying economics and in their competitive position. In Telstra’s case that drives them to very notable characteristics.
“First of all, they have a very strong incentive to delay the roll-out of any competitive infrastructure which levels the playing field in services to the home.”
The news from Australia should only make us wary of FINTEL. Is the upcoming announcement in July merely rhetoric of change from their part, when all that’s really being done is securing FINTEL’s competitive position? As wholesale provider of bandwidth to Vodafone, Digicel, Kidanet, etc. they say that market forces and competition will drive down prices. But, looking at what the Optus CEO is saying and the court ruling on the improper use of customer information, it is becoming harder and harder to believe FINTEL.
As developments in Australia prove, without competition in the operation of the underlying network, pricing of services will remain high.