Australia warns 'big gorilla' Telstra to back off
From AFP Global Edition | 2009-03-01 03:00:21
<div><p>Australia's finance minister on Sunday told the country's biggest telecoms firm Telstra to stop acting like a "big gorilla" and adopt a less aggressive stance towards the government.</p><p>Finance Minister Lindsay Tanner said Telstra would be better off improving its products rather than continuing the spats with Canberra that have marked outgoing chief executive Sol Trujillo's four years at the helm.</p><p>"He's been a rather colourful character," Tanner said of the company's US chief executive, who will leave mid-year. Telstra said last week it would appoint his successor by June 30.</p><p>Tanner said Telstra may have "irritated the hell" out of governments and business customers under Trujillo, but that the American had been acting in what he believed to be the best interests of shareholders.</p><p>He warned though that the company's aggressive stance was unsustainable in the long term and Telstra, which was once a publicly-owned monopoly, had to rethink its approach in the modern competitive environment.</p><p>"The world is different now," Tanner told ABC television.</p><p>Telstra has "had the view that it's the big gorilla that can throw its weight around and it can outlast any government strategy and squash its competition," he said.</p><p>"That may be true enough in the short term in the narrow interests of shareholders but we are committed to making sure there is genuine competition in telecommunications, particularly in broadband."</p><p>Trujillo was chief executive of the French-owned telecoms firm Orange until 2004 and before that worked at Colorado-based US West/Mountain Bell for 26 years, becoming the first Mexican-American to head a Fortune 150 company.</p><p>The tough-talking executive began attacking government regulations imposed on Telstra as he took over the company in July 2005, earning a rebuke from the then prime minister John Howard, who advised him to take a "reality check".</p><p>Relations with Howard's conservative administration quickly declined, with critics saying Trujillo was too used to getting his own way with lawmakers in Colorado and had misjudged Telstra's sway over Australia's national government.</p><p>By the end of Howard's term, some government politicians were publicly calling for Trujillo's sacking and questioning why he was receiving multi-million-dollar bonuses when Telstra's share price was sliding.</p><p>The rocky relationship with Canberra continued when Rudd was elected in late 2007 and hit a low last December when the company was excluded from a bidding process for a 10-billion-dollar (6.5 billion US) national broadband network.</p><p>Telstra failed to meet a government request to involve small- and medium-sized businesses in any proposal, prompting accusations of arrogance from officials.</p><p>Telstra in turn said the government's actions were "trivial and legally questionable".</p><p>Trujillo, 57, has also been criticised for pocketing a three-million-dollar bonus this year after axing 10,000 jobs during his tenure.</p><p>Tanner said Telstra must realise the government would always put the public interest ahead of those of the company's shareholders when making decisions on telecommunications infrastructure and regulation.</p><p>"Telstra's economic strategy has always been about trying to minimise competition and maximise returns out of particular products and not rolling out new things and innovating as quickly as perhaps it should," he said.</p><p>"That has been run in the interests of its shareholders, but we're acting on the interests of community... and our interests and the interests we represent are different to Telstra's."</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=43900353&bid=informcom" /></div><div id="copyright"><div>
Copyright 2009 <a href="http://www.afp.com/english/links/?pid=copyright">AFP Global Edition</a></div></div>
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