Aussie government won't be forced to sell telco stake

The Australian government will not be forced to sell its remaining 51.8% stake in Telstra, a senior minister, quoted by Associated Press, said.

The report quoted Treasurer Peter Costello as saying that "if the conditions don't suit then we've indicated that the government's Future Fund "&brkbar; would be a very suitable vehicle to hold that shareholding."

Telstra shares had dropped 4.7% since August 9, the day before the Melbourne-based company released its full-year results that showed a 26% fall in profit, the report said.

Various government leaders had indicated that a decision on whether or not to proceed with the full privatization of Telstra would be made within weeks, the report said.

However, Costello said "we are not a forced seller; we are not selling this to get the money, we don't need the money."

The government's plan to sell its remaining Telstra stake had been dealt a series of blows in the last week, the report said.

As well as Telstra's disappointing profit result, the company had warned that it might cut its earnings guidance after an unfavorable ruling from the regulator on what it could charge its competitors for access to its network, the report said.

The sale was then expected to make A$30 billion ($23 billion) in Australia's largest ever privatization, the report further said.