blog Remember how Telstra used to be basically prohibited from buying smaller telecommunications companies in Australia courtesy of its status as the nation’s former monopoly telco provider, and the need to maintain competition in the sector? Well, apparently the big T doesn’t feel those rules apply to it any more. Last month Telstra revealed plans to buy Adelaide ISP Adam Internet, and now, according to the Financial Review (we recommend you click here for the full article), Telstra’s going after some of the assets which Leighton Holdings recently put on the block as well:

“Telstra has formally entered the sale process for Leighton Holdings’ $1 billion telecommunications assets, despite the strong possibility of objections from the competition regulator.”

Leighton currently has three separate companies on the block. Nextgen Networks owns and operates Australia’s second largest long-haul fibre optic network (behind Telstra), spanning over 18,000 kms and connecting capital cities and major regional centres. It’s a major backhaul competitor to Telstra. The second company, Metronode, according to Leighton, is a datacentre specialist which currently operates six datacentres in Australia. Lastly, Infoplex offers private cloud and managed hosting services.

It’s hard to see the ACCC letting Telstra buy Nextgen, given the dramatic and immediate impact such a move would have on the backhaul telecommunications market. However, I can see the regulator letting Telstra buy either Metronode, Infoplex or both. Both companies operate in markets where there is already strong competition, and I don’t see a huge issue arising if they were bought by Telstra. In any case, it seems as though Telstra chief executive David Thodey (pictured) is definitely on the acquisition trail now. It might be a good time to give Telstra a call, if you have a company you think the big T might be interested in.

Image credit: Telstra

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1. Soth
   Posted 09/11/2012 at 1:05 pm | Permalink | Reply

   Hmm interesting… First Telstra say they will sign up with Leighton to share the new cable from Singapore to Perth, and then sign up with Huawei’s existing cable leaving Leighton to look else where to share the load. Related I do not know, just having a chin rub moment.

2. anonymous
   Posted 09/11/2012 at 1:58 pm | Permalink | Reply

   Holdings has repeatedly stated that all three businesses will be sold together as one entity and they will not sell them individually.

   Regardless, I have my doubts Telstra would ever get this past the ACCC, it would just give them to much power in the market.

3. Michael Wyres
   Posted 09/11/2012 at 2:06 pm | Permalink | Reply

   Telstra buying Nextgen would be an interesting call for the ACCC.

   Nextgen are the best placed NBN POI access aggregator currently, and this would shift that market considerably.

   Can’t see it going through without some heavily negotiated provisions.

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