[LINK] Fwd: Breaking Up Telstra (and Optus etc.)

David Boxall linkdb at boxall.name
Thu Oct 22 21:37:08 AEDT 2015

Forwarded with permission.

Any comments?

-------- Forwarded Message --------
Subject: 	Breaking Up Telstra (and Optus etc.)
Date: 	Thu, 22 Oct 2015 10:57:25 +1100
From: 	Malcolm Moore <mmoore at bigpond.net.au>


Hi David

Breaking Up Telstra

Having worked in the PMG / Telecom Australia / Telstra for over 30 years 
and being in the telecomms industry for over 45 years in a very wide 
number of Technical, Engineering and Commercial roles; I have a very 
detailed historical knowledge of the entire telecomms business and the 
associated infrastructures.

Before the introduction and wide adaption of silicon-based technologies, 
the PMG / Telecom Australia was primarily an analogue-based 
infrastructure business with very high technical and engineering 
overheads and a very small range of retail products.(The Plain Old 
Telephone Service (*POTS*) comes to mind.

After the very wide adaption of silicon-based technologies, Telecom 
Australia / Telstra (and all the associated "competing telecomms 
businesses") now have extremely low technical and engineering overheads 
and a large range of commercial retail products and services.

Put simply, it was *not privatisation* that made these telecomms 
business "efficient" it was purely the sequential *advances in 
silicon-based technologies* and the *development of software-based 
technologies* that made the telecommunications infrastructure very 
inexpensive to manufacture extremely inexpensive to maintain, and 
concurrently produced a wide range of new commercial 
telecommunications-based *retail products and services*.

The *competitive Retail Reselling* of what is now very inexpensive 
telecommunications infrastructure-based communications products and 
services makes the telecommunications businesses (Telstra / Optus etc.) 
look to be very highly efficient for all the wrong reasons.

With this diametrical change in business focus, the control of 
successive telecomms infrastructure rollouts shifted from the Engineers 
who knew and understood the overall telecomms infrastructure to the 
(Retail) Sales and Marketing executives who have a very limited 
knowledge of the infrastructure.Concurrently, the focus of 
infrastructure builds has moved to much shorter (sales-based) timeframes 
and localised to where the short-term ROI is maximised (for "maximised 
Shareholder value").

The Davidson Report (1982) created a telecommunications sector on the 
ASX to significantly broaden the investment base outside then mining, 
banking and insurance sectors, then proceeded to break up what was an 
extremely efficient telecommunications infrastructure commission into 
one of the worst possible economic scenarios: Privatised Competing 

 From about 1995 the Telecommunications Industry Ombudsman (TIO) started 
to be flooded with intractable service / billing complaints and since 
then there have been over 15 Select Senate Inquiries and Regional 
Inquiries (virtually one every second year) to report on, but not 
identify the causes of, the sharply declining state of 
telecommunications infrastructure in Australia.

Since then successive Federal Governments introduced several very 
ill-considered short-term (private sector favouring) "initiatives" and 
all of these were naturally failures because none of these "initiatives" 
were "infrastructure business" focused.

Essentially, the privatisation and splitting up of the highly efficient 
one "economy of scale" telecommunications infrastructure business has 
created an economic nightmare of monstrous proportions for successive 
Australian Governments, and this telecommunications infrastructure 
wreckage that is now seriously crippling non-metropolitan Australian 
business and life standards.

The current NBN (version 5) is an open admission that breaking up the 
Australian telecomms infrastructure was fundamentally flawed, and 
throwing in of over $50 Bn into the NBN from the Federal Government(s) 
is proving to be highly uneconomic because the NBN was essentially a 
rather flawed academic strategy instead of a well-considered engineering 

Infrastructure is virtually everything that is not Retail Reselling (all 
the exchange sites, switches, transmission equipment, racks frames, A/C, 
power, batteries, control support networks, cable conduits, pits, 
sputniks, radio base stations, towers, radio systems, satellite, earth 
base stations, Network Construction and Design, tractors, O/F trenching 
machinery etc etc – all of this (and more) is infrastructure-  none of 
this is Retail Reselling (shops, exec offices, etc). This split is 
really straightforward.

The merging of the ex-Telstra , Ex-Optus and NBN telecomms 
infrastructures into one "economy of scale" infrastructure business" 
(with an Infrastructure Business mindset) will quickly provide a massive 
internal saving because the overheads of inter-business leasing will 
immediately stop, floor-space in all exchange sites will become readily 
available and Engineers can plan and lead the building of the 
telecommunications network without short-term interference.

This "infrastructure business" mindset will in turn provide less 
expensive Wholesale prices, which will in return provide increased 
profits to the Retail Resellers.So the sale price of handing over the 
Telecomms infrastructure is ZERO.

The split is extremely simple:  Retail Reselling / Marketing   - - - -  
That’s it.  Can be done in about 10 working days from top to bottom.


Malcolm Moore JP BE(Elect.)
mmoore at bigpond.net.au <mailto:mmoore at bigpond.net.au>
02 9440 0541

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