Australia: Optus has argued that Telstra should be split to increase competition

[Bloomberg] Telstra Corp., Australia’s largest phone company, should be broken up under government plans to overhaul the nation’s communications industry and build a high- speed network, said Optus Pty, the carrier’s biggest competitor.

The former phone monopoly’s wholesale and retail operations need to be split up now, not when the A$43 billion ($35 billion) National Broadband Network is completed in eight years, said Sydney-based Optus, a unit of Singapore Telecommunications Ltd.

Today is the deadline set by Prime Minister Kevin Rudd’s government for public comment on how telecommunications policies and rules should be changed to promote competition and improve service. The administration aims to adopt new rules by the end of the year.

“Since Telstra competes with its wholesale customers in the retail market it has no incentive to treat those customers fairly,” Optus said in an e-mailed statement today. “In fact it routinely discriminates against those customers. The separation of Telstra is the best solution to deliver tangible improvements in broadband service, availability and pricing for consumers and businesses in the transition period.”

Telstra said its submission today took a “principled and practical approach” and that it is “committed to engaging constructively” with the government on the Internet network, without elaborating.

The Melbourne-based carrier is also committed to “helping develop a competitive and sustainable industry,” Geoff Booth, group managing director of Telstra’s NBN Engagement Team, said in an e-mailed statement that didn’t comment on the issue of splitting up the company.

Telstra Should Be Split to Boost Service, Optus Says