Australian government refuses to rule out structural separation of Telstra

Australia's communications minister has refused to rule out the possibility of enforcing structural separation of Telstra, despite the repeated warnings that the company will refuse to bid if structural separation remains a condition of the National Broadband Network (NBN) tender.

Australia's minister for broadband, communications and the digital economy, senator Stephen Conroy, was asked during question time whether Telstra would be forced to separate their retail and wholesale businesses if it wins the contract to build the NBN.

Conroy refused to rule this out, instead saying that the government will focus on objectives such as competition, open access and equivalence.

'It is not surprising that some proponents are keen to avoid the competitive tension of the NBN process by seeking to have regulatory options ruled in or out before bids have even been lodged,' he said.

Australia's shadow communications minister, senator Nick Minchin, has attacked Conroy for refusing to take advantage of a "golden opportunity" to provide clarity for the oft-criticised tender process.  

"Instead of answering yes or no to a simple, yet fundamental question in relation to the NBN process, Senator Conroy totally avoided the issue and waffled on about nothing for several minutes," Minchin said in a statement.

Telstra has repeatedly threatened not to bid on building the NBN if structural separation remains a condition. Most recently, last week Telstra CEO Sol Trujillo used the Telstra Investor Day to reiterate that threat.

Telstra will appear before the Australian senate this evening to discuss the tender. The government plans to subsidise the build cost of the winning entrant to the tune of $4.7 billion, but Telstra has estimated the cost to the winning bidder to be $10-15 billion.

Telstra is looking increasingly likely to be a lock for the building of the NBN - if it places a bid. Its only competition, the Terria consortium, has been bleeding members and struggling to find funds. That said, Terria has repeatedly insisted it will submit a bid by the November 26 deadline.

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