Optus, Telstra clash over broadband leadership claims

Optus is the true champion of broadband in Australia -- not Telstra, which found narrowband to be a "nice earner", says Optus chief executive officer Paul O'Sullivan.

Speaking at a luncheon hosted by the Committee for Economic Development of Australia, O'Sullivan launched a major broadside at Telstra, claiming the telco had enjoyed a "regulatory holiday", and that Optus' entry into the DSL market early last year was the main spark that ignited broadband take-up.

O'Sullivan said current regulation should be to create open competition, but it was instead backing Telstra as the "means to achieve national outcomes."

"Yet Telstra is trying to position itself as some kind of national champion -- and wriggle out of its clear legal obligations," he said.

"The law says that if you own a so-called bottleneck facility -- such as the telecommunications network owned by Telstra -- then you must provide 'access' to that network so that your competitors can use it."

O'Sullivan made specific reference to an interview with Telstra's outgoing chief Ziggy Switkowski, which suggested Telstra "is all about leading Australia into the sunlit uplands of ubiquitous high speed broadband access."

"Well, excuse me. Telstra might describe such a world, but based on their track record, if we leave it to Telstra we're going to be waiting a very long time before they deliver such a world," O'Sullivan said.

"Australia's household penetration of broadband services today is one of the poorest in the OECD. And a big reason that this has happened is because Telstra deliberately kept broadband prices high -- with the aim of keeping its customers on narrowband Internet for as long as possible."

O'Sullivan said this was because dial-up Internet had been a nice earner for Telstra, mainly owing to users taking out a second line for it, and which they tended to drop when they switched over to broadband.

"The fact is, Telstra has effectively enjoyed a regulatory holiday on broadband since its inception," he said.

O'Sullivan determined that the broadband tide changed because of Optus, not because of any regulation.

"Broadband penetration only took off when Optus entered the DSL market in early 2004," he said.

"Telstra responded with sharp price cuts. The result: total broadband services jumped to 1.5 million in December 2004 -- more than doubling in 12 months. If Optus had not acted decisively in early 2004, I would suggest to you that broadband penetration would still be stalled."

Telstra had a different take on O'Sullivan's remarks.

"What the Optus CEO has admitted today is that Telstra and other smaller competitors have taken the lead with DSL and Optus has missed the bus (beginning their roll out too late in March last year), now hoping to catch up by way of a regulatory helping hand from the government," reads a Telstra statement in response.

"Telstra believes Optus wants favourable treatment from the Government as a short cut way to overcome its own performance in the DSL market."

According to Telstra, Optus is whinging because it arrived "late on DSL roll out."

iiNet's managing director Michael Malone echoed this sentiments. Optus' terribly belated entry into the market doesn't appear to have had any visible impact on overall growth of broadband in Australia. Did it really take them four years to realise that ADSL was here?"

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Howard Dahdah

PC World
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?