Telstra Split Decision – Structural Separation Imminent

After months of speculation in regard to the ongoing structural separation saga of Telstra, it has been revealed that the decision is now inevitable and the once monolithic incumbent will now be separated into retail and Wholesale divisions.

The split doesn’t stop at Telstra internal divisions either, as it also involves the severing of affiliations with FOXTEL and its Cable network along with ceasing all operations in conjunction to new wireless broadband development.

Telstra have the option to separate voluntarily, otherwise new regulation legislation will open the door for the government to do so for them. This decision from Senator Stephen Conroy has now paved the way to facilitate the transition of the Industry across to the new National Broadband Network when previous Labor and Liberal governments failed to do so. The right call for Australia’s future, and a brave one too.

Although Telstra’s share price initially fell almost 5% in early morning trading, Mr Conroy has suggested that the separation could make it possible for Telstra shareholders, and all Australians, to benefit from the outcome. Market analysts agree that the decision would be greeted with a neutral reaction.

Interesting times ahead for the Teleco industry…