[LINK] AM today : Bob McMullin on Telstra breakup option

[Jan Whitaker]

AM should have a transcript of Bob McMullin on some time today about 
Labor's position on Telstra breakup into infrastructure and services 
businesses.  Parallels Link member comments recently.

There is an interesting quote when the point about the effect on current 
shareholder price was mentioned as being underminded by this 
approach.  Bob:  it's only a problem if the vertical integration is 
providing an unnatural subsidy /benefit in some way and that is the point 
of the criticism of unfair competition.

I.e. you can't have it both ways - either there is is open equal 
competition to other service providers or there isn't.  Right now there isn't.

also, the comment from the Government [in this case Kemp as Acting 
Minister] was that Labor was trying to sell off the profitable bits.  If 
it's the profitable bits that would come into private ownership, that is 
shareholders, and profit influences share price and dividends, isn't that a 
good thing for current shareholders as well?  Why isn't this being 
understood, or is my logic flawed?

Or is the problem really that the government doesn't want to take on the 
burden of the cost of infrastructure and lose out on its cash cow at the 
same time [those same profits and dividends that currently come back to the 
public purse]?

Also on AM, NFF is coming out against further sell off in the current 
review [can't remember the bloke's name - Esten?]

Jan

JLWhitaker Associates
Melbourne, Victoria, Australia
jwhit@primenet.com  --  http://www.primenet.com/~jwhit/whitentr.htm


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