Crikey’s exclusive insight into the rort that is Macquarie
Communications Infrastructure Group (MCIG) yesterday has
generated some further revelations about the way Macquarie Bank is making
these monopoly transmission tower assets “sweat”.
MCIG shares jumped 4% yesterday on the news that its majority
owned UK broadcast transmission services outfit Arqiva is expected to sign a one billion pound deal to upgrade the BBC’s digital transmission services over the next 25 years.
MCIG has accumulated more than a few enemies over the years and they’re
starting to talk. For
starters, they poached an entire team from one of their suppliers to
run the division that sells the transmission equipment and is trialling
DVB-H (TV to mobiles). Then there were some run-ins with Broadcast
Services Australia, which was formerly chaired by Richard Alston, over
fully managed services contracts. Many people inside the ABC are also
angry because they are paying way too much for digital TV transmission
Oh, and then you have all those poor people who use MCIG towers for
microwave dishes, a service known as Facilities Leasing, because they
have suffered site rental increase of up to 1000% since the
Millionaire Factory took control in 2002. And who are these victims? None other than various taxpayer-supported
bodies such as the fire services, state forests, coast guard, Telstra
and the like.
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All of these revelations confirm what a bad deal taxpayers got when
the ABC and SBS transmission assets were sold to British company NTL
for just $650 in 1999. It wasn’t long before NTL got into strife at
home and sold the
business to Macquarie Bank for $850 million in May 2002. Telstra was
the underbidder with an offer of $700 million which now
looks rather silly given that the assets are thought to be worth about
$1.5 billion after the $2 MCIG stapled securities closed at $5.64
Much of that valuation rise has come from slugging other taxpayer
bodies such as Telstra and the ABC. Wouldn’t it have made more sense
for the government to jack up its charges across the board, lock the
ABC into onerous long-term contracts and then sell the business to
capture more of the monopoly rent?
That might also have been a more sensible approach with Sydney Airport,
which Macquarie Bank has milked mercilessly since 2003 thanks to lax
government regulation on prices.
The Federal Government might finally have worked out how to capture the
upside with Telstra. The Sunday Agesplashed this week with a story about T3 going ahead, which included the following line:
A Government source said an announcement was close. “We will not be giving
away Telstra shares for $3.85,” the source said. “That means doing what is
necessary to give Telstra the regulatory certainty it needs and helping move
that share price back up towards the $5.25 target we’ve always had in mind.”
Stand by for consumers to get ripped off yet again – this time by the
government itself rather than the lucky buyer of the monopoly asset.
Oh, and what about this whole question of ASX continuous disclosure?
That outrageous statement is effectively the regulator and controlling shareholder
saying Telstra’s profits are about to rise strongly courtesy of
regulatory intervention. They really are a law unto themselves sometimes.