Australian Government Approves Full Sale of Telstra
Posted on: Wednesday, 17 August 2005, 18:00 CDT
Aug. 17--SYDNEY -- Australian Prime Minister John Howard announced Wednesday that the government has approved selling off its 51.8 percent share of Telstra, Australia's largest telecommunications company.
"This is a very beneficial announcement for the benefit of all Australians," he told a press conference.
"What we have produced today is the latest but in many respects the most important installment in a process of repairing Australian telecommunications," he said.
The legislation for the sale will be introduced when parliament resumes in just over two weeks, with the sale expected to take place sometime in 2006.
"The actual sale should be timed for a point when the return can be maximized for the Australian taxpayer," Treasurer Peter Costello said Tuesday.
Howard said the decision to sell was the most sensible option.
"Importantly, the decision does represent a recognition of market reality, and that is, it is absurd and counterproductive for a government to own more than half of the largest company in Australia," he said.
The announcement comes after weeks of debate during which coalition National Party members threatened to derail Howard's proposed full-sale of Telstra.
But an A$3.1 billion (about $2.37 billion) deal announced Tuesday to upgrade Telstra services to country areas has convinced skeptical coalition members to back the sale.
Under the plan, A$1.1 billion will be spent on upgrading mobile and broadband Internet services in regional Australia. A further A$2 billion will be allocated to a fund "to future-proof" regional telecommunications in the long term.
The opposition Labor Party has labeled the deal a "joke" and a "band-aid solution." Labor leader Kim Beazley questioned the logic of the government's argument, saying, "Isn't the only way to future-proof Telstra services, to keep Telstra in public ownership?" Mark Vaile, deputy prime minister and leader of the National Party, countered that the opposition has "offered nothing to this debate except criticism."
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Source: Kyodo News International, Tokyo
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