ABC 774 Melbourne - Federal Government does not have any intention of unilaterally forcing the structural separation of Telstra

JON FAINE: Senator Helen Coonan is the Communications - I'm sorry, the Telecommunications Minister in the Howard Government. Senator Coonan, good morning.

HELEN COONAN: Oh, look, it's still communications, Jon, not telecommunications, although you could be forgiven for thinking that.

JON FAINE: It keeps changing. Minister, as well as the war in Iraq and climate change and pulp mills and all the other things that this election's going to be about, is it also an election about the future of Telstra?

HELEN COONAN: Well, look, I think inferentially the future of Telstra certainly has come into focus but can I say from the Government's perspective that when we walked down the path of privatising Telstra and prior to that, of course, it was corporatised under Labor, Mr Beazley looked very carefully at structural separation, that is of the more robust kind that Mr Stanhope was just describing, and once you go into a privatisation it really wasn't appropriate to do anything that forced the structural separation of Telstra. We opted for operational separation and we do not have any intention of unilaterally forcing the structural separation of Telstra.

Now, that's subject to two comments. One is the board might well take a very different view because notwithstanding Mr Stanhope's comments, a lot of analysts can see value for Telstra if it were to do more with its very vertically integrated structure. It's the most vertically integrated telecommunications company in the world.

JON FAINE: On that point, Telstra, in fact, themselves say that they think they would not be worth more split up. I put that very point to Mr Stanhope the other day.

HELEN COONAN: You did indeed and, you know, that's a matter for them. Now, if they have that view and they can describe some growth and value to their shareholders, well, so be it. That's a matter for the board, the management, the shareholders and the market to judge Telstra. The Government will not be unilaterally forcing the structural separation of Telstra.

However, we do have in place an expert taskforce that is looking at the best way for a new fibre to the node build in major capital cities and regional centres and inferentially it is possible that a proposer who is other than Telstra might come up with an arrangement that would require some separation of the network, of Telstra's network.

JON FAINE: Sure, but…

HELEN COONAN: Now, that's really where it is.

JON FAINE: To cut to the core, Minister, because our time, of course, is tight, you're not, it would seem, you're not in the mood to do Telstra any favours at the moment.

HELEN COONAN: Well, look, it's not a matter of doing them favours. It's a matter of treating them like any other telecommunications company and making sure that they don't tromp all over consumers and this last issue that has arisen, was Telstra have said that they will not be turning off the CDMA network that is vital for the bush until the new Next G network provides equivalent or better coverage. All I'm doing is making Telstra stick to their promise and I've put a licence condition to require them to do no more than they have said they would do publicly.

JON FAINE: The Next G or 3G network that is replacing the old network may be up and running but it's no cheaper.

HELEN COONAN: No.

JON FAINE: And, in fact, if you want to use all the facilities that are on offer it's incredibly expensive. Does that enter into your equation?

HELEN COONAN: Not in terms of this licence condition but it certainly has entered into my thinking in rolling out what we now have got as a winning bidder, the new OPEL network that will offer prices of $35 to $60 for all the whiz bang fast service compared to…

JON FAINE: But if you just want a basic service these days, in fact, that costs you more too.

HELEN COONAN: No, the basic service is $30 under the new network whereas under Next G, as I understand it, on Telstra's website, it's $115 plus $300 to sign on plus I think a three-year contract. So it's expensive.

JON FAINE: But the point I'm making, Minister, is that all the discussions about the new technology keep concentrating on the high end. In fact, most consumers are interested in what's at the bottom end.

HELEN COONAN: That's why $30 from the OPEL network is what is going to be available to 99 per cent of the population.

JON FAINE: But in the old days you could have a service that cost you much less than that, if you wanted just a basic service for simple and occasional mobile phone telephony.

HELEN COONAN: Yes, but I mean, that's a matter of how the packaging is done and if you have an improved technology, well, obviously it does cost more. It does in any industry, improved technology means that there's some initial additional cost.

JON FAINE: But most consumers - I'm sorry, maybe I'm not explaining myself properly. Most consumers don't want and can't afford the new technology, Minister. They just want the basics and now that's going to cost more.

HELEN COONAN: Under the CDMA network what we're trying to ensure here with this safeguard for consumers is that it will not be switched off until they can get an equivalent or better service from the Next G network. So obviously all of these are considerations that are very important to consumers. It's basically what I do when I engage with Telstra. I try to stick up for consumers and to make sure that they continue to get the services they need and want wherever they live at a price they can afford. It's not too much to ask.

JON FAINE: Thank you for your time this morning.

Senator Helen Coonan, the federal Communications Minister.