Telstra threatens to hang up the phone

7 Jun 2007

Australian telco Telstra, which offers services in New Zealand via its TelstraClear unit, says it could dramatically scale back its investment in New Zealand if planned government reforms concerning the unbundling of the local loop fail to deliver the necessary investment returns. In an interview quoted by The New Zealand Herald, Telstra chief financial officer and TelstraClear director John Stanhope issued a stark warning that TelstraClear could scale down its plans to become a major player in the market if the outcome of LLU proved unfavourable, and instead focus on offering services to the business market. New Zealand’s telecoms watchdog the Commerce Commission is currently setting the price that former monopoly Telecom can charge competitors to access its network and services as part of wider sector reforms. With the process due for completion by the end of this year Stanhope is not mincing his words. He said if the ‘price wasn’t right for investment’ TelstraClear would look at refocusing its business.

New Zealand, Spark, TelstraClear