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Minister imposes a licence condition on Telstra to ensure that it cannot shutdown the CDMA network until Next G network is fully functional.



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PM

 

Monday 6 August 2007

Minister imposes a licence condition on Telstra to ensure that it cannot shutdown the CDMA network until Next G network is fully functional

 

MARK COLVIN: The Federal Com munications Minister Helen Coonan denies it's all-out war. But today, she fired some heavy artillery in the mounting battle between the Federal Government and Telstra. 

 

Helen Coonan says she'll block the telco from shutting down its CDMA rural network as planned in January, until the Next G service to replace it is fully functional. Just last week Telstra revealed that it would sue Helen Coonan over the failure of its tender for a regional broadband network. 

 

Jane Cowan reports. 

 

JANE COWAN: If Telstra thought it had the Communications Minister on the back foot, it might be thinking again. 

 

HELEN COONAN: Well today I announced that I have decided to impose a licence condition on Telstra to ensure that it doesn't switch off the current CDMA network. 

 

JANE COWAN: Helen Coonan says Telstra's own timetable for having the new network available for testing has slipped from August to October, and that won't leave enough time to check it before the CDMA shutdown scheduled for January.  

 

So, she'll impose a licence condition to stop the telco doing away with CDMA until the new network is up to scratch. The Minister says she's just standing up for consumers. 

 

HELEN COONAN: The complaints deal with problems with handsets, with dropouts and with coverage. So, I think that it's appropriate that consumers have a level of confidence that they're not going to be left stranded in the transition to the new network. 

 

JANE COWAN: Helen Coonan says it's nothing to do with placating the Nationals who have raised this issue as a concern, nothing to do either with the court action that Telstra has just brought against her over the awarding of a regional broadband deal to a rival consortium of SingTel Optus and Elders.  

 

HELEN COONAN: Well, it's got nothing much to do with the court action. I mean, this has been something that's been mooted for a very long time. I've never ruled out a licence condition. 

 

JANE COWAN: Telstra must be less than pleased with this development. The Minister says she wrote to the telco in June suggesting it delay the deadline for switching off CDMA and Telstra boss Sol Trujillo rejected the idea outright.  

 

But today Telstra spokesman, Jeremy Mitchell, said the company was unfazed.  

 

JEREMY MITCHELL: Telstra gave a commitment to our customers that the Next G coverage would the same or better than the old CDMA network. Canberra can impose a licence condition, but it makes no difference to us because our priority is to ensure that we deliver on our promise to customers.  

 

JANE COWAN: But telecommunications analyst, Paul Budde, isn't buying the spin. He says the Minister's latest move shows how far the relationship between Telstra and the Government has now deteriorated.  

 

PAUL BUDDE: We've lost total trust in Telstra, and Telstra has undermined its own position now for two years, and this is what the result of it is. And I'm pretty sure there will be more to come, you know, from the regulator, from the Minister, from the government. 

 

I mean, Telstra has united the country against itself, and I think that's not good for Telstra. And slowly we now start seeing that the position of Telstra, the uncooperative position of Telstra, is now going to hound them.  

 

JANE COWAN: So, you think that the Minister has done the right thing?  

 

PAUL BUDDE: No, I think, you know, that the right thing would have been to sit down and solve the problem in a more amicable way. But it's not the fault of the Minister; it's the fault of Telstra. 

 

Telstra has created this atmosphere where nobody can sit around a table with them to discuss things in the normal way. It's always shouting, it's always accusation, it's court cases, et cetera. So, nobody wants to be in that position, and that also includes the Minister. 

 

So, you know, while I don't necessarily agree with the process, at the same time, I fully understand her position and I fully support what she is doing. But that is because of the situation of the total telecommunications situation, rather than simply only for the CDMA, Next Generation mobile network. 

 

JANE COWAN: What will the upshot be, do you think, of all this tension between Telstra and the Government for consumers? 

 

PAUL BUDDE: I don't think there is any upshot.  

 

I cannot see any upshot in this Mexican stand-off that is now taking place for the last two years.  

 

I think, you know, that the only thing that's in… the positive thing for the consumers is that the Minister is not giving in, that the Minister, and actually the whole political arena, you know, Labor, Liberals, the National Party, they're all very much united against the stand that Telstra is taking. 

 

And what that means in any case, in the longer-term, that we in Australia will maintain a competitive network, that we will get good services, but unfortunately because of the current sort of stand-off, this might take a few years longer.  

 

So, the good thing is that the Minister is not giving in, the good thing is that the Minister is standing up for consumers, and that the Minister understands the consumers - specifically regional users in this respect - and that she is not going to show that, you know, that she's not going to let the consumers down in favour of Telstra. 

 

MARK COLVIN: Communications analyst Paul Budde, ending that report from Jane Cowan.