By Ian Verrender
Forget its much lauded five-year turnaround plan. For the past few years, ever since Sol Trujillo was installed as chief executive, Telstra has employed a three-step strategy to muscle out any competition.
It can be neatly condensed into three words: Bluster, Belligerence and Obfuscation.
Yesterday we saw it again in spades.
There was an air of bewilderment among the country's leading investment analysts yesterday after Telstra had been excluded from one of the most ambitious infrastructure projects announced by a Federal Government in decades: the construction of a national broadband network.
Could it really be that Telstra's board and management were so incompetent that they could not get past stage one in a tender process of this magnitude?
After all, there were only four main criteria that had to be met. The first was the proposal had to be lodged in English. The second and third had equally low hurdles. Metric measurements - not the old inches, feet and miles - were required and the bid had to be signed. Nothing too difficult there.
But the fourth criterion appeared to stump Telstra. It didn't include any plan for the inclusion of small business. And so the Communications Minister, Stephen Conroy, was obliged to exclude Telstra, an announcement that shook 12 per cent from the value of the country's biggest telecommunications company.
This was no accident on Telstra's part. It knew it was lodging a non-conforming proposal. Why, you ask?
The answer is simple. Telstra does not want a national broadband network, particularly one that involves anyone else.That includes taxpayers.
And if one has to be built, Telstra will do everything in its power to delay or kill the process. Yesterday marked stage one in a protracted war, ultimately designed to defeat one of Prime Minister Kevin Rudd's key election promises.
Trujillo claimed yesterday that Telstra had been unfairly excluded from the process on a technicality. That's just rubbish.
In recent months, the company, its chairman, Don McGauchie, and Trujillo repeatedly threatened to walk away from the tender process, and lodged the proposal only a few hours before the deadline.
Trujillo's rhetoric yesterday was laced with the usual mixture of bravado and threats. He compared Australia to North Korea or Cuba. He declared only Telstra was capable of building the type of network required by the Government.
But two lines stand out. First this: "Customers make the choice of who they do business with; regulators and governments and others do not." And then: "We reserve our rights regarding future action."
The message is clear. Telstra will launch legal action at every opportunity - and even when there aren't opportunities.
The Federal Court has been clogged with Telstra's cases against the competition regulator for the past three years. It even launched High Court action claiming - just as Dale Kerrigan did in The Castle - that it should not be forced to hand over its network to rivals on other than just terms. It failed spectacularly, with all seven judges giving the thumbs down.
Trujillo and McGauchie have stayed true to form with the Rudd administration. They believe telecommunications policy in this country should be determined not by government, but by Telstra.
Telstra's board and management have a duty to maximise shareholder returns. But a company that believes it has the right to impose its will over an elected government is a dangerous phenomenon, one that could lead to dire consequences for Telstra shareholders.
One reason investors reacted so violently to yesterday's announcement was a fear that, should a rival win the right to bypass Telstra's exchanges and connect fibre-optic cable right up to suburban nodes, Telstra's fixed-line infrastructure monopoly may be broken.
If it is not careful, Telstra may have that monopoly forcibly removed.