Telstra shareholders should not be shocked

The Government’s package of regulatory reforms announced yesterday should result in better services and lower prices, but the medium term impact on Telstra shareholders cannot be predicted, CCC executive director David Forman said today.

"Much of the reaction to the Government’s announcement yesterday is, frankly, bemusing," Mr Forman said.

"Some commentators have expressed shock at the announcement, yet all of the proposals introduced to the Parliament yesterday were raised by the Government in a discussion paper in April.

"The vast majority of respondents called for exactly what the Government yesterday announced.

"Furthermore, the CCC has been arguing for the separation of Telstra’s retail and wholesale businesses since 2004, as have some others.

"Those claiming to be shocked at the announcement clearly have not followed the debate.

"Furthermore, BT last year told a Senate inquiry that its share price actually increased after it implemented functional separation, so it is not clear that Telstra shares will necessarily fall.

"While it is important that the legislation is properly examined, the CCC urges the Parliament to pass the legislation this year.

"These issues have been examined time and again by successive Parliaments and the principles are well understood and broadly supported.

"The sooner these changes are implemented, the sooner consumers will benefit."

Contact

David Forman
Executive Director
CCC Inc
0438121114