The Telstra circus is getting more bizarre by the day. Even so, it’s hard to go past the sheer stupidity of the government launching a $20 million advertising campaign promoting T3 while simultaneously ripping into the company for taking out a few surplus pay phones.

If John Howard really believed T2 was “an extremely good deal for those involved” at $7.40 a share, on what basis does he and Peter Costello attack Telstra for attempting to reduce the $30 million lost on pay phones each year? By all means hop into Sol Trujillo’s pay packet and the government’s right to appoint Geoffrey Cousins to the board, but the pay phone rhetoric is just stupid.

Pay phone use has plummeted in recent years now that more than 20 million mobile phones are circulating throughout the community. More than half of Telstra’s 30,000 pay phones now lose money and the removal of 72 from 50 metropolitan train stations in Melbourne will only involve those that already have multiple phones. No station that currently has a pay phone will be left without one, yet the PM came out on Friday and said it was “a very silly decision”, “foolish” and “out of touch”. He also claimed it was “very bad public relations”, but this was mainly because of his pathetic over-reaction. With the T3 marketing about to take off, the PM should have defended the right of Telstra to move with the times and make a profit for its shareholders. No wonder Finance Minister is shaking his head in disbelief.
After all, there are still about 62,000 pay phones in Australia, but this has dropped by 10,000 over the last four years. It will continue to drop – as it should.

The Sunday Age splashed yesterday with Telstra’s plan to remove another 5000 pay phones in an election year, suggesting it was part of some plot to damage the government politically.

If the government really wants Telstra to retain the current level of pay phones, it should directly fund this from the budget. Long suffering Telstra shareholders have suffered for too long from a government that continues to claim the shares are “a great deal” whilst pursuing policies that send the share price south.

Peter Fray

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