InfraCo De-merger
Can I just start by saying that we're setting up [Telstra] InfraCo for the objectives that we said the three very clear objectives: provide transparency, improve the way in which we commercialise those assets and thirdly to create optionality for the future.
There is a sort of a, a bit of a dynamic where people then therefore presume that leads to somehow a de-merger of our infrastructure assets. That's absolutely not a decision that we have taken. Nothing that we're currently contemplating - we said we wouldn't even contemplate that until after the NBN is rolled out. But it absolutely makes sense for us to structure ourselves in such a way that we achieve the first two objectives and then create optionality for whatever and however the telco market is going to evolve in the future. So I just - I know you didn't say that Ian, and so that wasn't in response to your comment, but I just really wanted to make, and land that point, because there's no presumption here that that is happening. So that's the first point.
The second point is just specifically in relation to your question on what's motivated it. No it's not got anything to do with any regulatory or policy discussions or discussions with anybody else. It's the simple point that as Brendon went through, is that what we're trying to create with infrastructure, with [Telstra InfraCo]3 is really highlighting and identifying our infrastructure assets and ensuring that we operationalise those effectively and manage those effectively. And to Brendon's point initially we had the mobile backhaul out and not as part of it, but in practical reality the mobile backhaul is several strands within an existing fibre link. And practically it doesn't make a lot of sense to separate them. So that's another point I'd make.
Another point I would make is if you think about the mobile infrastructure essentially I always think about it, there is five elements to it really, there's the core, which actually Channa talked about a lot, and that's where we're doing a lot of standalone 5G - and there's that aspect of it. There's the physical tower. There is the backhaul to the tower. There is the radio access equipment and all the technology and the active technology in the antennas and the radio access network. And then there's the spectrum.
Now the passive pieces of those which Brendon talked about which are the physical tower and the backhaul are already subject to open access obligations from a regulatory standpoint. We already have to provide access to our towers to our competitors - then they can apply to do that, and vice versa. And there's a lot of tower sharing that actually happens in the industry. The active piece which is where all of the differentiation and the strategic imperatives sort of come from and in the spectrum and in the radio access network and 5G and everything that we're doing with Ericsson is all basically in Telstra.
TELSTRA INVESTOR DAY - COMMENT
From the Vic T&S Branch: Telstra Investor Day briefing 27/11/19 - where will these proposals leave the employees? (Before reading this, download the 40 page document sent to the Australian Securities Exchange which appears on the telstra.com.au web site.)
Closer examination of the "Investor Day" briefing documents from last week gives us a bit of a guarded insight into Telstra's thoughts on where it will position itself over the short term. In between understanding "corporate/market coded" messages on power point slides, as well as some analysis done by James Fernyhough of the Australian Financial review (See last Bulletin), the future for staff employed by Telstra is even more confused. However, the InfraCo vehicle for dismembering Telstra is right there in your face. Telstra appears to be clearly moving to set up InfraCo Pty Ltd as something it can sell a little bit down the track. So if the EBA is voted up, the "Operation Break Up" will begin in earnest.
A move to prepare InfraCo Business Unit (or InfraCo Pty Ltd for that matter) for future sale appears not out of the question, however the accounting speak such as "Asset adjustments" and "optionality" and "flexible business model" give current employees across Telstra very little comfort, if at all. It could well be a case of "precarious" employment in the future.
Telstra need to come fully clean about it's future plans - clear, concise and cut the bean counting accountants' word smithing crap. Only then can the workers of Telstra start planning their working futures. The whispers and thought bubbles of senior management and the Board need to be spelled out, analysed and confronted. This was an incredible company, but now it looks totally like a train wreck, presided over by a Board and senior management who have no consideration of the staff they have used to historically place Telstra in a pre-eminent position, only to then rub their noses in the pile of excreta they have produced. In fact, the Management of Telstra, at both Board level and across the company, need to carefully reflect on the number of Australian jobs they have killed off, the value of the company to investors in its current operation, and a bunch of other issues that have become apparent under their watch.
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