By Lucy Battersby
Investors send Telstra shares down more than 6% to a record low as prospects of a hung parliament cast doubts about the future of its broadband plans and the wider telecommunications industry.
The stock's fall, though, included the share going ex-dividend, contributing 14 cents to the fall.
While the three independent MPs who could decide which party takes power favour government-assisted telecommunications, they have not yet announced which party they support or whether a new broadband policy would lure them to a Coalition government.
The Coalition has promised to scrap the national broadband project in favour of incentives to encourage businesses to expand wireless broadband into regional areas, whereas Labor favours a government-funded project that would deliver fast fibre broadband to 93 per cent of the population.
NBN Co chief executive Mike Quigley. ‘‘We will do the things we need to do,’’ he says.Credit: AFP
Telstra's share price remains particularly vulnerable, with the company facing the biggest changes depending on the outcome - structural separation if Labor forms government, with a $9 billion cash sweetener, but longer-term uncertainty if the Coalition forms government.
Telstra shares ended the day down 19 cents, or 6.4 per cent, to $2.77 while the overall market was flat. At one point, Telstra was down 20 cents at $2.76.
Labor's national broadband network provided a better outcome for Telstra and could increase earnings per share by 9 per cent by 2013, according to analysts at investment bank UBS.
''We watch with interest with the rest of the nation, but it's business as usual for Telstra and we will continue to work constructively with all political stakeholders,'' a Telstra spokeswoman said.
Liberal leader Tony Abbott yesterday appeared to rule out adopting Labor's model to appease the independents.
''I intend to be very pragmatic, but within the broad policy parameters which we discussed during the election,'' he said.
And with no clear outcome, NBN Co must decide whether it keeps working until a new government emerges. ''There is a level of uncertainty right around the country. We will do the things we need to do, and look forward to seeing an outcome,'' chief executive Mike Quigley said yesterday.
''We will look at what was supposed to be happening this coming week, and we will make some decisions on it tomorrow morning.'' NBN Co was well funded for the immediate future, he said.
Rob Oakeshott, from the seat of Lyne on NSW's northern coast, has called the national broadband network an ''important step towards social equality'' for residents in his seat. Tony Windsor from inland northern NSW criticised the Coalition's broadband policy, saying competition had failed to deliver telecommunications to regional areas.
''[The NBN] is probably the most important piece of infrastructure; it is the one thing that can negate the disadvantages of living in the country,'' he said.
Bob Katter yesterday expressed disappointment with the current industry structure, saying - ''a privatised broadband, I mean, please, don't even talk about it; privatised Telstra has been absolutely disastrous for rural Australia''.
All three independents will be among the first to have broadband network services rolled out in their electorates.
The Greens have put their support for the NBN on the record, but would prefer it remains publicly owned.