I’m not sure I completely understand what the government has done and is trying to do with Telstra. To seek clarification, I’ve decided to pen my understanding.

The Australian Government sold investors the monopoly Australian telecom, Telstra. Which comprised the monopoly wholesale copper wire network and the then near monopoly business and retail telecommunications provider.

Since then the government has encouraged competition against the assets they sold and tried at every turn to limit the profitability Telstra would achieve in a free market.

Now, the Government has decided they once again want to own the monopoly wholesale communication network. So they’ve come up with a half baked plan which will be outdated before they implement it and considerably more expensive than what cold be achieved by the free market.

The plan hinges on both owning the Telstra network  and ensuring Telstra does not compete with them. After all the government does not to spend $43B and then be faced with competition.

Unable to bully Telstra into playing their game the government have decided to, is extort the right word or maybe blackmail, Telstra to surrender the monopoly they sold to investors.

In summary the government sold the monopoly at peak prices and then wants to gain those assets back via extortion. Is that right or am I confused?

Disclosure: I own Telstra shares and buy and sell them from time to time.

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