Conroy's sword drops on Telstra
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Posted Tue 16 December 2008 @ 2:41 a.m. by Ernie Newman
In a day of drama reminiscent of New Zealand's "Telecommunications Mayday" of 3 May 2006, Aussie Minister Stephen Conroy has booted Telstra out of contention for the building of Australia's National Broadband Network. Telstra had failed to comply with the RFP conditions in respect of SME participation. The Australian reports that A$6 billion was dumped off Telstra's value in a savage market response.
This dramatic move will rock the Aussie telecommunications sector like never before.
I'm picking that New Zealanders will be less surprised than most about this. The similarity to May 2006 when our parliament, almost to a man, rounded on Telecom NZ's bullying behaviour of the previous decade, is remarkable.
Early in 2007 I gave a presentation to our Australian sister group, ATUG, entitled "The Rise, Fall and Reconstruction of a Telco." In it I was bold enough to suggest several lessons that Australia might take from the New Zealand experience.
Lesson 1 was "If there is war between a phone company and a government, the government eventually will win."
Sadly, Telstra wasn't in the room - they have a habit of boycotting industry conferences these days unless they have had the opportunity to veto speakers that might have a point of view contrary to their own.
Telstra, I suspect, will rue the day it overplayed its hand. The lesson history is giving users globally is that the day the traditional telcos held all the cards, dictated to governments and rationed out economic development, are over. Countries now have options.
There will be consternation, soul searching and doomsaying today in Australia. But history will eventually see it as a positive moment - the day the transformation of telecommunications came of age, just as in New Zealand in May 2006. Telstra, like Telecom NZ, will eventually reposition and recover - Australia needs Telstra just as New Zealand needs Telecom.
Its just so wasteful, and such a pity, that incumbents seem intent on learning lessons the hardest way possible.
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