Telstra CEO Sol Trujillo must really think he’s come to a backwater
after yesterday’s underwhelming appearance in Canberra where he was
attacked for proposing to remove a modest number of anachronistic pay
phones and generally questioned over Telstra’s commitment to services in the bush.

With the number of mobiles quadrupling to 18 million over the
Howard years, surely it makes sense to progressively wind back
uneconomic pay phones. Terry McCrann has been a lone sane voice
pointing out the breathtaking
stupidity of the campaign to save these dinosaurs, even if he repeated
the arguments from Tuesday’s Herald Sun in The Weekend Australian.

It seems bizarre that even Communications Minister Helen Coonan joined
in the attacks when she’s meant to be preparing Telstra for sale and
maximising returns for taxpayers.

What makes all this political micro-management of Telstra even more
curious is the contrast with the outrageous gouging that the
government-licensed bank cartel does without any politicians
complaining.

NAB regained its title of “Australia’s biggest bank” and the value of
our Big Four banks hit a new record of $206 billion, more than four
times the $49.25 billion market capitalisation of Telstra, after the
following moves yesterday:


NAB:
up 63c to $36.55 ($58.57bn market cap)
CBA: up 34c to $44.50 ($57.35bn market cap)
ANZ: down 4c to $25.66 ($46.95bn market cap)

WBC:
up 18c to $23.73 ($43.46bn market cap)

Despite NAB’s embarrassing $22 billion blunder on loan
classification figures in
its annual accounts, its shares soared to a record high and CBA has
been deposed from top spot in terms of market capitalisation.

If our politicians are really worried about poor service and gouging
then they should look at the $20 billion a year in operating profits
that the banks will make this year and do something about it.

If current trends continue, Telstra will soon be worth less than all of
the Big Four banks, yet the political class doesn’t seem to care about
all this consumer gouging by a government-licensed industry. The
$8 billion received from the privatisation of CBA is certainly looking
very sick compared with its $57.35 billion value today.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW