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Optus welcomes historic reform of Australian telecommunications sector
26 Nov 2010

Optus today welcomes the passage of the Competition and Consumer Safeguards bill in the Senate and looks forward to the same outcome when it goes before the House of Representatives on Monday.

Paul O'Sullivan, Optus Chief Executive said, "This reform will address many of the issues which have adversely impacted competition in the Australian telecommunications industry over the last 20 years. With the Bill's passage through the House of Representatives on Monday we will finally have the regulatory framework for true competition and a level playing field in the fixed line market.

"It is almost twenty years since competition in the Australian telecommunications sector was first introduced with the granting of Optus' carrier licence in 1991. In that time we have seen competition in the mobile sector flourish. On the other hand competition in the fixed line sector has languished, with only 10 per cent of Telstra exchanges providing competitive services today. As a result, Telstra has retained close to 70 per cent market share and more than 80 per cent of the profits in the fixed line sector. Telstra's dominance continues despite numerous attempts by Optus and others to compete and provide greater choice, value and improved customer service to Australian consumers and business.

"Our ability to effectively compete in the fixed line market has been constrained due to an inadequate regulatory regime, one which allowed Telstra to operate as both a wholesale and retail provider despite an inherent conflict of interest. This flawed regulatory framework, plus a lack of any real power for the ACCC to intervene, has allowed Telstra to frustrate the market for many years. Since 1997, Telstra has lodged 157 access disputes, 34 regulatory undertakings and 15 Federal and High Court appeals in an attempt to preserve the status quo. As a result it has maintained its stranglehold over the fixed telecommunications sector - until now!

"While we recognise the benefits of these reforms will not be realised overnight, it represents a major catalyst for change in the telecommunications market which will ultimately deliver great choice for consumers and business," Mr O'Sullivan said.

The Competition and Consumer Safeguards legislation closely mirrors the model Optus put forward for regulatory reform over many years to enhance competition. Optus has long advocated for a regulatory framework built around the four key pillars of structural separation; equivalence of access; cost-based pricing; and increased ACCC oversight.

"We believe the passage of the Competition and Consumer Safeguards bill will address many of the issues which have adversely impacted competition in the Australian telecommunications industry over the last 20 years. As the number two service provider in the market and the natural challenger to Telstra, Optus is poised to take advantage of a level playing field in fixed to drive competitive outcomes for Australian consumers and we congratulate the Parliament on creating the conditions necessary for a vigorously competitive fixed line market," Mr O'Sullivan said.

Media contact:
Clare Gill
Optus Corporate Affairs
Tel: (02) 8082 7850