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Mon, Aug 08, 2005 - Page 12 News List

Australia tells US telecom chief to try to fit in better

AFP , SYDNEY

The new US chief of Australian telecommunications giant Telstra, Solomon Trujillo, needs to adjust to his new business environment, Communications Minister Helen Coonan said yesterday.

Trujillo, who has only been in Australia a matter of weeks, has ruffled the government with his comments that Telstra is over-regulated and that some requirements for services in the country's vast outback "belong to the last century."

He has also demanded that Telstra's competitors, led by Singapore Telecom's fully-owned subsidiary Optus, share the burden of guaranteeing services to the "bush" and stated that Telstra's obligations to outback customers were unsustainable.

"I think it shows that the new CEO has come out of a different regulatory environment into a very different culture and I'm very keen that he should be aware of the way in which we approach telecommunications in Australia," Senator Coonan said.

Speaking on ABC television, Coonan said that Telstra received a subsidy to provide a minimum guaranteed service to bush customers.

"I think it's perhaps a bit simplistic to just concentrate on the minimum legislated safeguards when the government subsidy and Telstra's share of it gives a very different picture of the total government investment and commitment to new services," she said.

Coonan said that Telstra remained the only company currently capable of maintaining services to remote and rural areas.

"I think it reflects the state of competition which is not perfect, and which emerges unevenly ... in a country as big and diverse as Australia," she said.

The sale of the state's 51.8 percent stake in Telstra, expected to take place late next year and earn about A$32 billion (US$24 billion), has been threatened by the coalition government's junior partner, the National Party, which wants the sale to include guarantees on rural services.

Prime Minister John Howard strongly supports the sell-off and said yesterday the sale would be discussed at a meeting of coalition MPs tomorrow.

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