Government paves way for Telstra break-up

The Federal Government has announced a package of telecommunications reforms that will force Telstra to separate its retail, wholesale and infrastructure businesses, unless it voluntarily agrees to separate.

In a statement issued this morning, Communications Minister Stephen Conroy said: “If Telstra chooses not to structurally separate, the legislation provides for the Government to impose a strong functional separation framework on Telstra.”

Conroy said they are giving Telstra the option to voluntarily submit a proposal to the ACCC outlining plans to separate.

“It is the Government’s clear desire for Telstra to structurally separate, on a voluntary and cooperative basis,” he said.

The draft laws will require Telstra to lose its cable network and divest its interests in the pay television arm, Foxtel. Telstra will be prevented from acquiring additional spectrum for advanced mobile services.

“These fundamental reforms address the long-standing inadequacies of the existing telecommunications regulatory regime. They will drive lower prices, better quality and more innovative services,” Conroy said.

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