CANBERRA -- The Australian government said Tuesday it wants Telstra Corp. to the nation's largest telecommunications company, to agree to structurally separate its wholesale and retail arms as Canberra prepares to build a new 43 billion Australian dollar ($37.02 billion) high speed national broadband network.
If the group doesn't agree to structurally separate its businesses, Canberra will impose a "strong functional separation" framework on the company.
"It is the government's clear desire for Telstra to structurally separate, on a voluntary and cooperative basis," Communications Minister Stephen Conroy said in a statement.
"Telstra is one of the most highly integrated telecommunications companies in the world across the fixed-line copper, cable and mobile platforms," Mr. Conroy said.
Competition watchdog the Australian Competition and Consumer Commission, and some of Telstra's rivals, had argued that the government should force a much tougher structural split on Telstra -- requiring a legal separation of Telstra's assets and activities into separate corporate entities with entirely separate owners and shareholders -- to allow the ambitious new open-access network to compete on equal footing.
The plan, contained in telecommunications legislation to be introduced into Parliament later Tuesday, would allow the government to impose a strong functional separation framework on Telstra if the telecommunications firm chooses not to voluntarily separate. That would mean that Telstra has to conduct its network operations and wholesale functions at arm's length from the rest of the group, and provide equivalent price and non-price terms to its rivals.
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