Timed local calls

[Ian Johnston]

> From: Alan Kohler <akohler@ozemail.com.au>
> To: link@charlotte.anu.edu.au
> Subject: Timed local calls
> Date: Thursday, 27 March 1997 23:35
> 
> The Government's
> decision to not extend the untimed call option for bussiness data calls
> after July is definitely an attempt by Telstra and the Government to
> capture greater revenue from the Internet.

> Telstra must get full value from the growth in Internet traffic to
> maintain revenue growth as the growth in mobile volumes slows down. I
> think,  but don't know, that the Government understands this and that this
> is why the untimed call option has not been extended for business data
> calls - to allow stockmarket analysts to factor timed calls for Internet
> traffic into their revenue projections for the float, which will enhance
> the value. That will offset the value-destroying elements of the new
> regulatory regime from July 1.

I would be surprised:

(a)  if key Government Ministers and their advisers did not know; and

(b)  if the Telstra sale advisers to the Minister for Finance's Office of Asset
Sales (OAS) and the OAS's CEO did not know;

(The CEO and former Deputy Secretary of DoCA and DoF, Mike Hutchinson, has
driven many of the telecommunication reforms of the last decade, and now has
responsibility for the Telstra privatisation.)

Due diligence and the Telstra prospectus will disclose financial forecasts for
Telstra.  Any policy or regulatory decisions that improve forecasts, and add
value to Telstra and the Commonwealth's shareholding, are likely to be
favourably looked upon by Cabinet and its Expenditure Review Committee in a
Budget context. 


Ian Johnston