John Linton
If the rumours that Leighton's will be selected to build whatever the 'NBN' turns out to be actually becomes fact you can only wonder what will happen to the current immutable status of Australia's communications industry. I know virtually nothing about Leighton's current and future abilities to provide communications services other than Exetel use them for Perth and Adelaide back hauls because they are very easy to deal with and provide a flawless service at the lowest price of all such providers - so a big tick in a minor way as far as that goes. As Leighton's have a long and successful history in terms of major construction builds around the country including running their own quite comprehensive communications network they don't sound like a company that wouldn't be able to build a very large communications network with the assistance of more than a few Federal Government billions.
The immediate effect has been on the Telstra share price which fell to an all time 12 year low of $A2.97 when the rumour became very strong late last week cementing El Sol's total failure and McGaughie's total stupidity in foisting such an inept CEO of one of Australia's most important companies and the 80% or so of Australain residential and business users that use Telstra's services. By all means blame the 'GFC' all you like but El Sol's principal task was to improve Telstra's share holder value not to destroy it. It seems likely that the today's Telstra share price will soon seem to be a high point if, as rumoured, Krudd announces early next month that the 'NBN' will be attempted and that Leighton's is the selected builder. I guess you couldn't ask for a more unbiased, and possibly more competent, builder of a new communications infrastructure than a construction company that has no retail telecommunications customers and one which has built communications infrastructures for several carriers in this country. A for innovation and AA+ for "bravery" as Sir Humphrey might have put it had he still been with us.
If Leightons does in fact get awarded the contract then you can expect Telstra's share price to again fall very sharply on the day such an announcement is made and then to fall further. If Telstra should then obstruct the build of the 'NBN' (irrespective whether it eventually gets anywhere near its eventual 'targets' or not) it would seem inevitable that Telstra's share price will fall even further and keep falling as the institutional investors bail out of the stock as it will be seen as going nowhere but to a break up of the company. So that's what McGaughie/El Sol have delivered to Telstra's shareholders via their personal unbridled greed, crass stupidity and massive judgment errors. Well done - but what else would anyone seriously expect given the published track record of both persons? So Telstra will go from a very profitable company with a "sky's the limit" future on the day of El Sol's appointment to a company facing absolutely no future with a tanking share price before he bails out and carries his truckfull of money back to his next "major appointment". You almost have to admire the sheer depth and breadth of the mess he has caused in such a short time.
The other crazy party to this fiasco, Krudd and his 'sound bite election winner' posing as a policy, will now have to face the music of what will actually be built with the tax payer's money - though given the fact that Krudd has already p***ed away over thirty billion in various pointless hand outs what does another five or ten billion matter? With that sort of money Leightons will be able to significantly extend their current national back haul network and presumably will, if they get the relevant access, be able to run the fibre to a fair percentage of end users in regional Australia leaving rural Australia to be connected back to it's interconnect points in 'difficult areas' via Optus HSPA or whatever. Don't hold your breath waiting for very much to be delivered any time soon.
What will Telstra be left with? In one way it will be left with what it always should have wanted - domination to the point of monopoly to the profitable 80% of the market it always targeted PLUS it will be free of the mandated guarantees (USG) of servicing difficult and costly areas of Australia. It will retain so much dominance that it can still charge whatever prices it wishes to for quite a while. So, looked at dispassionately, it doesn't really lose anything in terms of losing its 'monopoly position' - but it will lose any residual regard even its most ardent supporters may have for it as its greed and bullying become ever more obvious in its obstruction to both the 'NBN' and everything peripherally associated with it......which can only lead to the final stupidity of the El Sol appointment.
I, of course, have no real knowledge of what has already transpired in the shaping of the current iteration of the 'NBN' at this time other than to be pretty certain it won't be the final version. Any final, final version has to include the break up of a bully boy Telstra and the incorporation of the 'NBN' into the network part of Telstra under some new authority which will be carried out on the basis of the 'GFC' causing the government to 'act decisively' to 'protect Australia's national interests'. If that does eventually happen, probably not in my lifetime, it will be interesting to see what a properly deregulated communications industry delivers to Australia.
Anyone think I'm wrong?