Suppose someone said to the government: “if you don’t decide in our favour in extactly 53 days time then we won’t invest billions to give consumers pretty much what they already have.” You would never seriously believe that they would want to be seen giving into such threats. But, it appears that Telstra believes precisely that. Yesterday, it made exactly that threat.
TELSTRA chief executive Sol Trujillo has warned the Government that Telstra will cancel any plans to build a $4.5 billion high-speed fibre broadband network if there is no decision on who should build it by the end of next month.
The private threat came as Telstra also attempted to ratchet up the public pressure on the Government by revealing the cheapest price for its proposed broadband network.
In a briefing to journalists yesterday, Telstra executives said the company would charge $59 a month to its rivals for access to a basic service.
But this would give users relatively slow speeds of 512kbps – only double the current basic model and just 1 per cent of the maximum speeds of 50Mbps possible with Telstra’s proposed new fibre network.
I hope Telstra shareholders take note. After all, when their CEO makes a threat in negotiations, you want it to be credible. If it isn’t carried out, this means that it is not credible and won’t be believed. Remember this is the same CEO who negotiates over equipment supply cost; you know the usual stuff firms in markets do to keep down costs.
[…] August has arrived. A month and a half ago, Telstra CEO Sol Trujillo set this day as the line in the sand beyond which, if the government had not acted in Telstra’s favour on broadband, it would […]