Telstra wants its foreign ownership rules reviewed



blog Whether or not you believe that it’s an issue in terms of the companies’ ability to compete effectively with multinationals, it has always been true that Australians in general have always been a little leery of letting foreign investors too close to our national icons — our banks, our airports, our major shipping concerns, and of course Qantas and Telstra. The Foreign Investment Review Board has always maintained a close watch on these sensitive areas, with a view to making sure the national sovereignty is not weakened too far. However, in the wake of the news that the Federal Government will try to weaken some areas of Qantas’ foreign ownership rules in an effort to provide the airline with a more level playing field with Virgin, Telstra chief executive David Thodey has called for the same debate to be held with respect to Telstra. ZDNet was at a lunch with Thodey in this week and tells us (we recommend you click here for the full article):

“… he said that in a similar vein to Australian airline Qantas’ recent lobbying to the Commonwealth Government to lift the cap on its foreign ownership, the foreign ownership rule on Telstra should be reviewed. ‘Over time, as the nation moves to NBN… I think it should be reviewed.'”

Currently the rules regarding with Telstra are broadly that foreign ownership of the telco is limited to 35 percent, with individual foreign investors only allowed to own up to five percent. Do I think this rule should be reviewed? No. Clearly, in Australia, Telstra has no problems competing against its rivals and is, in fact, dominant in the market. There is no need to give Telstra further advantages, and it is strongly in the public interest for our largest national carrier and the current owner of the majority of the nation’s telecommunications infrastructure to remain in public hands. Personally, I would feel more comfortable if Telstra was owned, perhaps by up to a third, by the Federal Government. This is one company which still needs to be closely monitored and, sometimes, controlled. I do not wish it to be bought by AT&T or BT, thank you very much.

Image credit: Telstra


  1. I have no problem with Telstra being foreign owned on one condition.
    The 100% full sepertaion of a wholesale only infrastructure business to remain in Australian hands. None of this bull on paper structural separation we promise we wont show favours to our retail arm I swear mr ACCC. Then it really doesn’t matter who own the retail arm as everyone selling Telstra infrastructure is on the same terms.

    Personally in the longer term I wouldn’t mind seeing all wireless infrastructure* go the same as it is really the only way to manage capacity and spectrum constraints in the long term.

    *I do mean all including broadcast spectrum.

    • ^ +1 to this.

      I don’t care if Telstra is foreign owned, just so long as there is a 100% complete separation of retail and wholesale.

      Give the entire CAN, the hardware (exchanges, etc…) to say NBNCo, then let the retail arm be owned by whoever.

      • While I agree on principle that the separation of retail and wholesale arms is a good thing, this does bring up some questions.

        Is the wholesale network just the copper to the premises, what about the trunk lines, or mobile phone towers? Could they be considered infrastructure since Telstra (as well as Optus) sell capacity to resellers.

        • It’s easy. Just do what the Po\\Brits did to British telecom: cut off everything that even resembled hardware, and then cut the remainder off to fend for itself. The Brit government now (as I understand it) owns all copper, fiber, DSLAMs, exchanges… BT is now very wealthy and highly competitive.

  2. I was just thinking this morning that with the Qantas foreign ownership rules set to change, that Telstra would be asking for the same next.

    And, lo and behold…here it is…

  3. The idea of National Icons is outdated. If Telstra is a National Icon then what does that say about the Nation?

    Internode were a National Icon, or at least a State Icon.

    Telstra owns too much critical infrastructure to sell more of it to overseas interests. Wasn’t there a security fear with purchasing networking gear for the NBN from Huawei? What if the Chinese Government wants to buy into Telstra? Or the Indonesian Government?

  4. This story was on The Australian five days ago.

    In any case, you’ve completely missed the point Renai. The foreign ownership cap was placed on Telstra to protect it through the process of privatisation. The theory was that foreign companies should not have a controlling stake in our monopoly fixed line comms network. But with pirvatisation now complete, and with Telstra agreeing to hand over its position as fixed-line monopoly to the NBN, the original aim of the foreign cap no longer applies.

    You’re exposing your naivety by failing to understand what this is about.

    • I don’t read The Australian that much ;) It’s hard to find the worthwhile needles in amongst the haystack.

      “Telstra agreeing to hand over its position as fixed-line monopoly to the NBN”

      That process is two decades away from being complete, and Telstra’s dominance of the fixed-line (and mobile) telco market in Australia remains very much intact … as for my naivety, I leave that for readers to judge :)

  5. This will without a doubt increase prices charged by ALL providers. Once the overseas-owned telco’s see they have a market of users currently paying premium prices for crap products and services they’ll be here like a shot, and I’m sure those companies won’t REDUCE the prices the ripoff merchants at Telstra have set.
    If Telstra are allowed to sell their infrastructure to anyone they like, why spend millions on Army, Navy and Air Force to protect our country from invasion? The morons in Canberra – regardless of which party they are aligned with – need a damn good kick in the pants for the way they’re running Australia into the ground. Pretty soon, we’ll be nothing more than a tourist destination owned by Asians and Middle Eastern tycoons…

  6. Telstra wants to be on the same level field as singtel /optus, iinet , it should be reviewed Telstra has been unfairly treated by the pro NBN supporters.
    The coalition will make sure Telstra isnt disadvantage ,it should be on the same level as the competition like iinet who are getting away with more then it should .

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