Telstra’s current war with the media is the most combative approach
we’ve seen with the business press since Solly Lew and Lindsay Fox took
on the world during the Yannan scandal at Coles Myer in 1995. Look no
further than this extraordinary speech that Telstra’s chief spindoctor,
Andrew Maiden, gave last Friday and the continuous stream of attacks
appearing in Rod Bruem’s blog at nowwearetalking.com.

The results are clear to see – thin-skinned editors and reporters are
lashing back, but lately they have not been letting the facts get in the
way of their conspiracy theories. Bruem wrote the following on 27 July about The AFR and The Australian’s telco writer, Michael Sainsbury:

This week my colleague Warwick Ponder has written about questionable news
standards at The Australian Financial Review. I’m also scratching my head with a
media dilemma of my own, wondering what on earth has been driving The
Australian’s
telecommunications writer to get so hot under the collar about
Telstra. I reckon there must have been something in the drinks at the National Press
Club when Sol Trujillo gave his address on June 29th.
Since then, Michael Sainsbury has used his weekly comment pieces to go on the
attack.

The question of whether Telstra kept the market informed about the
pending ACCC announcement of a new pricing regime on the unbundled local loop (ULL) for suburbia is a
classic example of our two national papers letting their personal
prejudices get in the way of rational reporting.

The AFR opened the batting with a page one splash on Tuesday
that mentioned Slater & Gordon and class actions in the third
paragraph, because Telstra shares had fallen 9c the previous day after
the ACCC ruling was released to the market. Given that Telstra was only
advised of the ruling late on Friday night
and informed the market before trading began on Monday morning, what on
earth is everybody complaining about?

Telstra company secretary Doug Gration has responded with a perfectly
reasonable letter in today’s AFR, explaining that it would be illegal
to publicly disclose an earlier draft ACCC ruling of $17.70 and the company simply maintained
the assumption that the current ULL pricing of $22 would continue. Fair
enough too, we’ve all seen big differences between draft and final
regulatory rulings over the years and why anticipate an adverse regulatory decision before the judge makes a final ruling?

Sainsbury then backed up The AFR with his column today by saying
that
Telstra should have changed its profit assumptions to include the draft
ruling when he wrote: “So will Jeff Lucy take another look at
the big telco? He should. Investors bought shares last Thursday and
Friday without full knowledge. This week their investment is worth
13-15c less.”

What rubbish – a 3% drop is not material. Besides, Telstra can’t be blamed for the regulator arbitrarily
forcing it to cut prices by 20%. It is Graeme Samuel and his
political fellow travellers in the government who should be blamed for
Telstra shareholders taking a modest hair cut this week – and a 50%
cut since T2.

If Sainsbury wants to tell ASIC to investigate a company
over poor disclosure, it should be engineering giant Downer EDI which
caused a 30% share price slump last week with a genuinely shock profit
warning – and this came just four months after raising $125 million in
a placement. Investigating every 3% share price dip for poor disclosure
would have the corporate plod doing nothing else. It’s time these
thin-skinned hacks stopped focusing on personal payback against Telstra.

Peter Fray

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