13 December 2004

Telstra scoping study

The Australian Government will undertake a scoping study into the possible sale of the Government's remaining shares in Telstra, the Minister for Finance and Administration, Senator Nick Minchin, announced today.

The Government will advertise later this month for advisers to conduct the scoping study.

Senator Minchin said the Government is proposing to re-introduce the Telstra sale legislation into the Parliament in 2005. Neither the undertaking of the scoping study nor the passage of the legislation would bind the Government to sell Telstra, in any particular timeframe or way.

"The Government has always stated that it has three pre-conditions for the sale of Telstra: arrangements must be in place to ensure the adequacy of telecommunications services for all Australians; legislation has to be passed through the Parliament; and there must be an appropriate financial return for the taxpayer," Senator Minchin said.

"A scoping study is an essential part of looking at the third precondition - if, how and when an appropriate return for taxpayers could be achieved."

In conjunction with the scoping study the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, will look at the adequacy of the current telecommunications regulatory regime, implement the remaining recommendations of the Regional Telecommunications Inquiry (Estens Inquiry) and continue a program of visits to rural and regional Australia.

"The Government is committed to ensuring that all Australians have access to adequate telecommunications services, regardless of where they live," Senator Coonan said.

"In 2005 I will continue to travel around Australia listening the concerns of rural and regional communities and ensuring the recommendations stemming from the Estens Inquiry are implemented."

Senator Minchin said the possible return from a Telstra sale is dependent on a number of factors, including the timing of sale; future share price and dividend levels; sale structure; whether the shares are sold in one or more tranches; the level of sale costs; and use of other financial instruments.

The scoping study is designed to provide advice on all of these issues. It is expected that, for the major appointments of business and legal advisers, expressions of interest to undertake the scoping study will be advertised before the end of December, with a request for tender to short-listed candidates issued in February, and advisers selected in March.

Communications and process advisers would be appointed in a similar timeframe.

It is expected that the scoping study will be completed by mid-year.

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