Editorial: Keeping up the fight

Editorial: Keeping up the fight

Will Telstra hold back the NBN?


The war between Telstra and virtually every other communications provider in Australia went into overdrive last week as the telco argued against forced separation to the Senate (see page 1).

The battle – this time around – began with the Government’s proposed telecommunications reforms and intention to finally break the telco goliath into two. Despite its first outward appearance of conciliation, it was obvious Telstra wasn’t going to let structural separation occur without a fight.

After making its plea for more time and different terms, communications minister, Stephen Conroy, was quick to launch a rebuttal, asserting the Government had no intention of backing down on the proposal and was confident of reaching a resolution with Telstra by the end of 2009.

ARN spoke to several industry players, groups and analysts to gauge their thoughts on the situation. What became immediately apparent was that the industry wholeheartedly supports the scheme, even at the risk of annoying the pants of Telstra shareholders. Secondly, it’s impossible to overestimate the effect this decision will have on the forthcoming National Broadband Network (NBN).

If Telstra continues to drag out the fight against separation, the Government risks stalling development of the biggest and most beneficial IT initiative this country has ever seen. The $43 billion next-generation network is going to present a range of opportunities for all facets of the ICT industry – many we haven’t even thought of yet. Without Telstra’s input or support, the NBN could be hindered by unnecessary competition or worse, be delayed or diminished.

Let’s hope action around Telstra’s separation proves swift and concrete.

In other news, I was surprised to hear about the plans of Hallmark’s new owner, Ashok Alexander, to expand the NT-based business (see page 4). For those who don’t remember Hallmark in its glory days, the company was a signifi cant national PC assembler and hardware distributor in the late 1990s to 2003/2004, when a series of tough sales cycles and bad merger choices left it a shell of its former self.

Over recent weeks, ARN has covered the demise of components distributor and PC builder, TodayTech, as well as Protac Computers. These organisations are just two of many smaller distributors who have exited the market in recent years. That’s why I initially assumed Hallmark’s plans to ramp business back up (albeit within the centre of Australia fi rst) would be an insurmountable challenge.

During a recent chat with Dicker Data founder, David Dicker, I asked him why he thought the distribution market was consolidating and these types of players were quitting the stage. His response was two-fold: On the one hand, distributors are absolutely reliant on strategic vendor relationships and support; on the other, volume was crucial to maintaining cash fl ow and improving efficiencies.

Yet while Protac and TodayTech exited stage left after losing relationships and sales, there are still a few independents, like Dicker, who’ve managed to battle on. I wish Hallmark the best and hope it can succeed where others have failed.

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