The Australian Shareholders' Association says the federal government's planned reforms for the telecoms industry are a "giant kick in the teeth" for shareholders.
Communications Minister Stephen Conroy today announced reforms that pave the way for separation of Telstra's wholesale and retail operations and the implementation of the government's high speed national broadband network initiative.
ASA chief executive Stuart Wilson says there is not one good thing for shareholders in the proposal and Telstra shareholders will suffer if they are implemented.
"I think it's a giant kick in the teeth for Telstra shareholders," Mr Wilson said.
"It severely damages the earnings potential of the company and there's really not one good thing for shareholders to come out of the proposal legislation.
"(Shareholders) main concern is that they purchased Telstra shares in good faith and off the government.
"And now, a few years later, the government is imposing these draconian selective rules on the company that they just purchased.
"So they're feeling particularly hard done by."
Mr Wilson also questioned the Future Fund's recent sale of shares in the telco.
The fund, which operates independently of government, sold off a third of its stake in Telstra three weeks ago netting almost $2.4 billion.
It presently holds an 11 per cent stake in the telco.
"Whilst there has been much speculation as to what the national broadband plan development may be, it is curious that the Future Fund sold so much stock immediately prior to this devastating announcement and perhaps worthwhile of a few questions from the market regulator."
AAP