A leading shareholder in Telstra on Sunday called for its planned A$25bn ($18.2bn) privatisation to be halted until the Australian telecoms carrier operated in a “workable regulatory environment”.
The Australian government is planning to offload its remaining 51.8 per cent stake in the company, but the run-up to the sale has been clouded by Telstra’s bitter battle with Australia’s chief competition watchdog over “unfair” regulations.
Telstra has warned that it will lose A$850m this year because of regulations requiring it to give rivals below-cost access to its network.
In a rare move for an institutional investor, Anton Tagliaferro, managing director of Investors Mutual, a Sydney-based fund manager, publicly backed the company.
He told the ABC TV programme Inside Business: “Unless Telstra has a clear and workable regulatory environment . . . clearly the float should be postponed.”
He added: “There are more than 100 telecoms players in this country and no one can argue that it is not competitive. Competitors, who are mainly foreign entrants, want to be able to cherry-pick Telstra’s best customers and do not care about services to rural Australia.”
The government is unlikely to abort the planned sale, but Mr Tagliaferro’s comments illustrate how divisive it has become.
The comments come as Telstra is embroiled in a dispute with the government over how much prospective shareholders should be warned about the impact of regulations on its operations.
Shares in Telstra sank 6 cents to a record low of A$3.71 on Friday amid growing fears that it may be forced to cut its annual dividend. The shares are now trading 10 per cent below the government’s target price for the full privatisation.