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