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The tussle between Telstra and Australia’s competition regulator intensified on Monday after the country’s dominant telecoms company was warned it might be forced to further slash its access charges.
The Australian Competition and Consumer Commission said it was worried Telstra was not applying “reasonable’’ charges for so-called public switched telephone network services, which are used by its competitors to connect to the incumbent’s network and channel long- distance calls between fixed and mobile phones.
Telstra said that, by failing to reveal its cost model, the ACCC was acting like “a renegade agency that has deserted customers and shareholders in favour of Telstra’s competitors – both here and overseas”.
The latest spat between Telstra and the regulator is unlikely to please Canberra, as the government has been striving to avoid such animosity as it prepares for a A$8bn (US$6bn) public offering. The government’s decision last month to divest its remaining 51.8 per cent stake in Telstra, which will involve a share sale and the transfer of the remaining stock to an autonomous fund, was only taken after a pledge by Telstra’s board that it would help promote the offering.
The war of words could also worry the global co-ordinators for the share sale – UBS, Goldman Sachs JBWere and ABN Amro Rothschild – who are instead trying to convince the government to raise the offering by about 50 per cent.
They claim that many of the funds and other institutional investors who have helped wipe out one-quarter of the value of the share price over the past year are keen to reinvest at a lower price and raise Telstra’s weighting in their portfolios.
Furthermore, the share price has held up better than expected since last month’s offering announcement.
The offering is expected in November, but analysts suggested on Monday that Canberra was likely to hold off on setting the terms.