dlochrin at dot.net.au
Wed Feb 18 12:40:19 EST 2004
At 07:06 AM 18-02-04 +1000, Chirgwin, Richard wrote:
>>Prime Minister John Howard says a report that Telstra considered and then rejected a proposal to take over the Fairfax media group illustrates the need for its full privatisation.
Yes, he claimed it was unfair to the shareholders who own 50% of Telstra. However he neglected to say how the ~20,000,000 Australians who are stakeholders in the other 50% might feel about flogging it all off. I doubt he even considers them relevant.
>Two days ago in Sydney, Andrew Odlyzko reiterated what's obvious from the outside, that content is a bad way for telcos to make money. But it seems to be a message that never penetrates the reality-challenged world of the boardroom. [To be fair, it's also really hard to get journalists to accept the idea that content is not king; we're (ugh!) 'content providers' and the crown is flattering!]
The fact that Telstra are seriously considering such adventures illustrates why it should be split into two parts, a 100% publicly-owned provider of network and POTS services and a 100% privately-owned provider of applications services. Labour were considering this proposal at one time - perhaps it will be aired again now that St. Mark is in charge.
Telstra are under considerable pressure to develop a "growth strategy" and so it will only be a matter of time before some daring Board Room initiative is actually set in motion. However their record with Daring Board Room Initiatives is not good (remember Pacific Century Cyberworks?). Splitting Telstra would ensure the Board cannot simply rely on the public to underwrite such adventures via domestic 'phone charges, which is a form of private taxation.
Telstra's only feasible growth strategy is acquisition of other telcos, as was pointed out on ABC Radio National this morning - they know absolutely nothing about running a newspaper. However they are not the biggest telco around and would inevitably be acquired by a large American company, especially if we fail to drive a stake through the heart of the US "free" trade agreement. Full privatisation of Telstra in its current form would result in a large annual outflow of funds from Australia, and place an essential service outside Australian control.
The idiocy of privatising an essential service for idealogical reasons is just breathtaking.
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