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August 7, 2006
Australia’s incumbent carrier Telstra, is reported to have abandoned its A$4bn (£1.6bn) fibre network after a dispute with the competition regulator. The state run operator scrapped the project after reportedly failing to reach an agreement on how much it would charge rivals to access the high speed network.
With the Australian government putting increasing pressure on Telstra to iron out its regulatory wrinkles, this latest move puts the A$32bn privatisation of the company in further doubt.
Douglas Gration, Telstra company secretary said that it was not satisfied that its investment in network would not be used to subsidise competitor access. “The major stumbling block was the ACCC’s unwillingness to recognise the actual costs that Telstra incurs in providing its services,” Gration said.
But one of the requisites of the government’s 51.8 per cent stake sale of Telstra, pencilled in for later this year, is that the carrier resolves its numerous regulatory clashes. The government is expected to decide some time this month whether to proceed with the share sale.
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