Optus to sue Telstra over alleged anti-competitive practices

Australiam telecom giant Telstra, one of the parties arguing aginst Telecom's number portability stance, is on the other side of the argument on its home turf - and the stakes have been raised with a lawsuit from its competitor Optus, which cites Telstra's alleged refusal to make number portability available. The other grounds for the suit will also seem strangely familiar to New Zealanders. Optus says Telstra has refused to supply local call access or local call resale to Optus 'either at all or on reasonable terms and conditions', and that Telstra is cross-subsidising its pay TV services.

Australian telecommunications carrier Optus has announced its intention to take rival telecom provider Telstra to court after alleged anti-competitive practices.

In a statement, Optus officials said that the company is to begin legal proceedings against Telstra under section 46 of the Trade Practices Act, alleging that Telstra has "engaged in a concerted anti-competitive strategy which has denied consumers the benefits of competition." Although the Australian telecom market was officially deregulated on July 1, Optus officials claim that real competition is still some way off.

Telstra, the dominant player in the home telecom market, is currently owned by the Australian government, with a public sell-off of a third of the company planned for November. The major stockholder in Optus is Cable & Wireless PLC, which raised its stake in Optus to 49% after purchasing BellSouth's shares in the company in July.

The Optus allegations center around three major issues. The company claims that Telstra has refused to make local number portability available - the capability for consumers to retain their original phone number when they switch service providers. It also alleges that Telstra has refused to supply local call access or local call resale to Optus "either at all or on reasonable terms and conditions." The third complaint relates to Telstra cross-subsidizing its Foxtel pay television joint venture with News Corp. Optus contends that Telstra has "massively subsidized the preferential price at which Foxtel's pay TV services are delivered over the Telstra network."

Telstra officials were unavailable for comment.

Both Telstra and Optus announced disappointing year-end financial results last month. Telstra's profits fell by 30% compared to figures for the previous 12 months.

Telstra, based in Sydney, Australia, can be reached on the World Wide Web at http://www.telstra.com/. Optus is at http://www.optus.net/.

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