Fed: Coonan encouraged by Trujillo's $5bn bush plan

AAP General News (Australia)
08-11-2005
Fed: Coonan encouraged by Trujillo's $5bn bush plan

CANBERRA, Aug 11 AAP - Communications Minister Helen Coonan says a plan by Telstra's
new boss to spend $5 billion rolling out hi-tech services to the bush is encouraging.

Sol Trujillo is due to outline his plan at a meeting with Senator Coonan, Prime Minister
John Howard and Finance Minister Nick Minchin in Canberra today.

The plan reportedly involves a boost to fibre cable, wireless and satellite services
in rural Australia.

"I think it's encouraging to see the new CEO looking at having some vision for Telstra,"

Senator Coonan told reporters.

"Obviously the government wants to have a look at what the proposal is.

"The government is very clear that we provide a good, strong competitive regime.

"We will not be rolling back regulation, but we are interested if there are some areas
of market failure. That's where we have now invested over $1 billion of taxpayers' money
to ensure that services in rural and regional Australia are adequate.

"I just want to see what elements of Mr Trujillo's package might address some of that."

Senator Coonan said the government was also interested in plans put forward by Telstra's
rivals, Optus and Austar.

Optus says it will build new telecommunications infrastructure in the bush if the government
allows it to use the money it tips into the universal service obligation scheme, which
subsidies services in rural areas.

Austar has also offered to build a wireless broadband internet network in the bush
if it receives some money from the government.

"There are a number of interesting proposals that obviously need to be looked at,"

Senator Coonan said.

"We're interested in where the market won't go or in under-served areas, so there can
be elements of all of these proposals that the government would consider."

Telstra today announced a record net profit of $4.45 billion for the 2004/05 financial
year, but warned that its underlying earnings this year would fall.

Senator Coonan said earnings from Telstra's traditional fixed line phone services appeared
to be under pressure.

"The fixed line is under pressure, but then there are other profit centres," she said.

"And most modern telecommunications companies have to look at new markets. I think
that's what Telstra will do."

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KEYWORD: TELSTRA COONAN

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