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Senior executives of Telstra on Tuesday stepped up the company’s war of words against its biggest rival and the Australian government, warning that over-regulation would dent its chances of flourishing after next year’s full privatisation.

Speaking at its annual meeting in Sydney, Donald McGauchie, chairman, told an audience of 1,200 private shareholders that Telstra, Australia’s dominant telecoms provider, faced “10,000 pages of regulation” and 350 separate laws.

Sol Trujillo, chief executive, later picked up on the theme, slamming “regulatory decisions that destroy shareholder value”. The government’s planned regulations, he warned investors, would “materially damage” the company.

The government plans to pocket A$30bn (US$22.6bn) by selling its remaining 50.1 per cent stake in the company late next year. John Howard, prime minister, mindful of the government’s fractious coalition and its key rural constituency, has promised that a privatised Telstra would adhere to its universal service obligation to Australia’s “bush”.

Since taking over in July, Mr Trujillo, a telecom veteran, has argued that forcing Telstra to enhance rural services and to provide its rivals with access to its fixed-line network at reduced prices would undermine the company’s ability to generate profits.

Tuesday’s comments were designed to increase the pressure on ministers in Canberra to take a softer line on possible regulations. Mr Trujillo is expected to further attack government plans when he unveils his strategic review of Telstra in about three weeks.

Mr McGauchie also took a thinly-veiled swipe at rival Optus, owned by Singapore Telecom, which he referred to as “a self-serving competitor from Singapore”.

Mr Trujillo, an American, later proclaimed: “Telstra is majority-owned by Australians. We are not from Singapore or anywhere else.”

However, Telstra executives faced criticism from ordinary shareholders, many of whom have had the value of their holdings slump further since Mr Trujillo took over. One shareholder, Carole Carpenter, said the board should be dismissed. She added: “We have had it with you people, you couldn’t even run a chook [chicken] raffle.”

Copyright The Financial Times Limited 2017. All rights reserved.
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