Telstra shareholders fear they will be the bunnies
Sydney Morning Herald
Thursday September 17, 2009
The Australian telecommunications network was built and paid for by taxpayers over many years, starting with a small population and a very big country. We did a good job €“ Australia had a first-class network. It was privatised and the money paid back to the government.To then offer its competitors a $4 billion incentive to build an "improved" network seems generous in the extreme. What would China say if we suggested building a competitive system for them, provided they allowed us to use their existing infrastructure and paid us $4 billion?The Government's latest proposal will cut the worth of Australia's second-biggest company by value ("Wipe-out: $1.8b lost on threats to Telstra", September 16). I am sure the shareholders, employees, suppliers and customers will long remember who did this.The many advertisements for phone plans seem to indicate we have plenty of effective competition already for consumers' communication dollars. The foreign owners of the rival phone companies must consider this government action the most generous and perhaps the most immature in the world. Ministers didn't like Sol Trujillo telling them they were going about improving broadband delivery the wrong way €“ so they will now show who's boss. I predict they will regret it.David Shrubb GalstonThe forced break-up of Telstra is another blow to Australian taxpayers and a bonus for investors in the Singapore-based Optus.Australian taxes created Telstra, many taxpayers paid again to retain their ownership as shareholders and may pay a third time if their shares fall in value due to the forced restructure. So much for competition policy, which seems to be a competition to become worthless.John Ronalds Castle HillThe government sold Telstra shares to Australians based on the business model of the company at the time. The value of the company's shares was based on that model, including all its infrastructure and Foxtel shares.Now the government has decided, after pocketing the cash, to enforce the restructure of the business, which may dilute the value of Telstra shares.The government should compensate shareholders for any dilution in value being forced onto the company through its reforms. Anything short of this should outrage Telstra shareholders.Doug Duncan FloravilleThe Howard government began to privatise Telstra in 1997 to release it from the shackles of legislative control. Have I missed something?Lawrie Jones CopacabanaScrew me once €“ shame on you. Screw me twice €“ shame on me.The investors who bought the government's "privatisation" promises in T1, T2 and T3 are now ruefully looking at a loss of more than 50 per cent of their investment. With that memory, they will not be investing in the national broadband network, and they are likely to remember their loss at the next election.John Youngman Rose BayCongratulations, Kevin, now we all need to consider sovereign risk when deciding where to invest our money, just in case you want to nationalise any other businesses.I guess Peter Garrett was right about changing it all once you got in.Peter Denham CarlingfordHaving jeopardised the value of the Telstra shares it sold me so that other telecommunications companies will make more profits, will the Government now force Coles and Woolworths to split their liquor, petrol and grocery outlets so that small retailers get a better opportunity for profits?Richard Kirby Woodbine
© 2009 Sydney Morning Herald
