Telstra Scraps Australia Network
By Nina Sovich and Lyndal McFarland
The Wall Street Journal
Tuesday, August 8, 2006
Australian telecommunications company Telstra Corp. said it
won't go ahead with plans to build a high-speed broadband
network in Australia because negotiations with regulators over
whether it would be required to share the network with
The spat is the latest example of how big telecom companies
across the globe are battling regulators over new technologies.
Governments want to spur competition for high-speed Internet,
television and phone calls to benefit consumers, but they face
resistance from telecom giants that say they won't invest in
costly new networks if they have to allow competitors to
piggyback on them.
Regulators in Germany and France are still debating whether to
make Deutsche Telekom AG and France Télécom SA offer their
competitors access to any new networks they might build. In the
U.S., the Federal Communications Commission ruled in 2004 that
telephone companies wouldn't be forced to lease their new fiber
networks to their competitors.
Telstra's decision deals a blow to French telecom-equipment
maker Alcatel SA, which had signed a memorandum of understanding
with Telstra to build the network.
The agreement included numerous technologies and systems.
"Telstra sought an outcome that would assure Telstra
shareholders that their investment in the network would not be
used to subsidize network access by Telstra's competitors,"
Alcatel's shares traded down 3.2% at €8.49 ($10.93) yesterday in
Alcatel has struggled to convince the market that its merger
with Lucent Technologies Inc. of the U.S., slated for late 2006,
will right the enterprise. A spokesman for Alcatel said the
company would continue to do business with Telstra and had made
suitable preparations for regulatory problems.
Write to Nina Sovich at
firstname.lastname@example.org and Lyndal McFarland at