ACCC warns Telstra on ambitions

Telstra Corporation Ltd has been warned by the competition regulator that any attempts by the telecom giant to extend its share of the broadband market by buying or building a low-cost brand will come under harsh scrutiny, according to The Australian Financial Review.

Reports of increased scrutiny come in the wake of the collapse of Telstra's attempt to buy South Australian internet service provider Adam Internet for $60 million. The proposed deal collapsed after nine months of regulatory hurdles.

Australian Competition and Consumer Commission (ACC) chairman Rod Sims told the AFR that the regulator and the government are prepared to adjust laws to ensure any attempts by Telstra at a spin-off would be harshly reviewed.

“Something like this is always going to take a long time,” Mr Sims told the AFR.

“Telstra is unique because they own the copper wire ... and only Telstra could offer low-cost network access and give better service to Adam than other players.

“There was a time when they said 'this is a small transaction, why do you care?' and the answer is 'it's small but you're only doing it to turn into something huge.'

“But if we can't deal with it [under existing legislation] then we may need to go to government to get it dealt with.”