Telstra given extension on separation plan

Dylan Bushell-Embling
26 Apr 2011

Australia's Telstra has been given 90 more days to prepare its proposal to split its retail and wholesale divisions, before the government imposes separation on it.

The government had originally given the once state-owned operator until April 1 before it stepped in with legislation that would enforce a functional separation, and prevent it from acquiring more mobile broadband spectrum.

But with that date come and gone, the communications ministry has extended the deadline for Telstra to submit a separation proposal to regulator ACCC until June 30, the Australianreported.

The reason for the delay is that Telstra is still negotiating with NBN Co on the final the terms for its A$11 billion ($11.79 billion) deal to migrate its customers and provide its network of copper ducts to the NBN project in exchange for agreeing to separate.

The company has already postponed its shareholder vote on the separation proposal, originally due by July 1, as a result of the lengthy negotiations.

But while Telstra is preparing its plan, new concerns are brewing from its competitors over the consequences of its participation in the project.

ABC News cites an anonymous senior telecom executive as stating Telstra is becoming reluctant to roll out new copper lines - that are bound to be replaced by the NBN's fiber cables - in smaller housing estates.

Some residents have also complained of being told they are stuck with wireless technologies, potentially until the NBN reaches them in up to eight years' time.

But Telstra says wireless is merely being used as a temporary measure in these estates, while works are completed for a permanent solution.

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