Telstra's CEO and chairman have written to reassure shareholders over the government’s plans to force structural separation on the carrier.
Chairman Catherine Livingstone and CEO David Thodey yesterday told investors that despite “misconceptions” raised by the media, the board “will not agree to things that we do not believe are in your company’s best interests.”
“The board and management continue to have the interest of shareholders as our over-riding priority. Indeed, it is our responsibility to do so,” the letter said.
The pledge follows complaints from eight investors holding more than 500 million shares between them.
The group last week wrote to the board condemning the government for its proposed legislation enforcing the separation of Telstra, and urging the company to hold a meeting to discuss the threat to shareholder value.
Australian communications minister Stephen Conroy on September 15 proposed new legislation that would enforce functional separation on Telstra if it refused to structurally separate.
But investors in the stock – the most widely-held in Australia – are concerned that any form of separation would wipe out billions of shareholder value.
A former government-owned monopoly, Telstra provides retail phone, internet, mobile and business services, and also operates a wholesale copper network that is the only means of fixed-line access in many areas of the country.
Under the proposed legislation Telstra will be forced to conduct its retail and wholesale functions at arms length - and would be barred from owning more mobile broadband spectrum - if it does not voluntarily separate.