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govt says t3 might be delayed

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    Govt, Telstra hose down sale speculation
    04/05/2006 06:10:05 PM AAP

    The government and Telstra have moved to hose down speculation of an announcement on the telco's full sale when the federal budget is handed down next week.

    A letter from Communications Minister Helen C-oonan to Prime Minister John Howard leaked to the media last month raised hopes of a solution to key sticking points relating to Telstra by Monday - the day before the budget.

    There was also speculation the Australian Competition and Consumer Commission (ACCC) would report on how it planned to regulate Telstra's proposed $3 billion fibre network to Senator C-oonan on Friday.

    Telstra's fibre-to-the-node (FTTN) network would bring faster internet access to around four million businesses and homes who are currently too far from an exchange to receive high-speed broadband.

    Telstra had argued it needs certainty about the rules governing how competitors could access the network before spending money on it and wants to ensure it can recover its costs.

    The ACCC has said it wants to ensure the rules foster competition in terms of networks and downstream services.

    Finance Minister Nick Minchin was also tipped to put a proposal on the sale of the government's 51.8 per cent stake in Telstra, known as T3, to cabinet's pre-budget meeting in Canberra on Monday.

    But a spokesman for Senator Minchin said the speculation was misplaced.

    "There will be a revaluing, as there is every six months, of the government's shareholding in Telstra, based on a 90-day average," he told AAP.

    "But there won't be any announcement on how the government will proceed."

    Senator Minchin said earlier this week he would like the government to decide on the T3 sale "in the next few weeks", but the issue of how the FTTN network was regulated would need to be settled before a final decision could be made.

    The decision could be stretched "for another month or so if we have to", the minister told Sky News.

    Telstra chief financial officer John Stanhope told an industry briefing while the talks with the ACCC were constructive, an imminent decision should not be expected.

    "I think you know we are working to a timetable which you've seen in the press - the expectation of May 8 that the cabinet will meet to talk about those things," Mr Stanhope said in an address posted on the ASX website.

    "There's a lot for them to think about on that day, so we shouldn't have too high an expectation of what might come out of that day, given it's a very complex issue."


 
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