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Australia's senate has approved legislation for the full privatisation of Telstra, the telecommunications group, after the government won support of a wavering senator and defied opposition pressure for more scrutiny of the bills.
The Senate, Australia's upper house, voted for five bills to sell the government's remaining 51.8 per cent stake in Telstra, worth A$28bn ($21.6bn), paving the way for the final approval of the sale legislation by the lower house on Thursday. Once approved by the lower house, a formality as the coalition has a majority, it will become law and set in train the planned sale of Telstra in 2006.
The government hopes Telstra, likely to be the world's largest market offering next year, will achieve about A$5.25 a share. The previous tranche of Telstra shares sold in 1999 at A$7.40.
The company's share price closed flat at A$4.36.
The government used its senate majority, with the support of Barnaby Joyce, a National party senator who had earlier opposed the sale legislation, to gag debate on the bills, sparking scenes of outrage from opposition senators.
David Forman, spokesman for the Competitive Carriers Coalition, a lobby representing rival telecoms companies, said “people's heads are spinning” after the government, which permitted one day of public inquiry into the bills, pushed through the sale legislation.
The legislation proposes an “operational separation” of Telstra, the former telecoms monopoly, into three business units comprising its retail and wholesale arms. But it remains unclear what Telstra's operational separation would mean in practice.
Some lawmakers and competitors fear a fully privatised Telstra could abuse its dominance. Australia's competition watchdog has also raised concerns.