Telstra has been playing a high-risk strategy over tendering for the National Broadband Network, submitting a deliberate non-compliant tender which the government has now confirmed excludes it from the process. The brinkmansip game appears to have failed at the first hurdle, though the implication is that the government should reshape the tender process to its parameters after other bids are considered or face years of litigation. The inducement to the government to play the game Telstra’s way is the inevitable further delay of the construction of the NBN.
The share market hasn’t received Telstra’s strategy benignly, though, to understate the point, with 12% of its market value being wiped out yesterday.
But Telstra has one friend – “free market” thinktank the IPA. IPA Research Fellow Chris Berg writes:
Governments are going to have to step back from micro-managing the telecommunications sector. Market forces need to determine the shape of such a quickly developing industry, not regulators.
Apparently that translates into support for a quasi-monopoly keen to destroy its competitors, avoid structural separation and gouge its customers. Intriguing.
Elsewhere: Gary Sauer-Thompson and Paul Budde in New Matilda.
Update: Bernard Keane in Crikey.
Update: Peter Martin on Telstra’s “war on everything”.