Australia renews push to split telco major Telstra

16:36 | 20/10/2010

SYDNEY, October 20, 2010 - Australia Wednesday introduced a bill to split former state monopoly telco Telstra into retail and wholesale arms as part of its ambitious plan to build a national high-speed broadband network.

Prime Minister Julia Gillard said the "landmark" bill would make the telecommunications market more competitive and productive, declaring it a critical step in rolling out the National Broadband Network (NBN).

"For too long Australian consumers have had the experience of a telecommunications sector with far too much market concentration in one company," Gillard told reporters, referring to Telstra.

"With this legislation we can effectively restructure the industry... to deliver broadband services to all Australians at a uniform wholesale price."

"This reform is vital because it will drive lower prices, better quality and more innovative services," she added.

The $43 billion  (42 billion US) NBN, to be rolled out by a government-owned corporation, aims to deliver an economic boost by providing 93 per cent of the vast country's population with superfast Internet by 2017.

Gillard's government claims it will revolutionise workplaces and services including manufacturing, agriculture, education and health for the sprawling nation, connecting remote residents to doctors and online schools.

Telstra, formerly owned by the government, is the nation's dominant telco by subscribers and revenue, and splitting it into wholesale and retail arms is aimed at loosening its stranglehold on the market.

Telstra agreed in June to sign over access to its vast copper and cable network to the NBN for nine billion dollars, a major boost for the project, which has been described as Australia's biggest ever infrastructure venture.

If implemented, Telstra would likely become the national network's largest customer by transferring its customers from its copper wire and cable networks to the new fibre optic system to be built and operated by NBN.

The bill could prove the first major test for Gillard's fragile coalition government which will rely on a handful of minority lawmakers to overcome hostility from the conservative opposition to the broadband plan.

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