http://business.smh.com.au/slap-for-telstra-is-a-relief-for-farmers/20080118-1ms
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Slap for Telstra is a relief for farmers
Matt O'Sullivan
January 19, 2008

TELSTRA is heading for its first collision with Kevin Rudd's Government
after a last-minute order from the Communications Minister blocked its
planned switch-off of its regional mobile network.

In the first test of the relationship in the lead-up to negotiations over an
$8 billion national broadband network, the minister, Stephen Conroy,
yesterday postponed the closure of the CDMA network for at least three
months. The decision is a major slap in the face for Telstra, which wants to
shift its CDMA customers to its $1 billion-plus NextG network.

Telstra had been scheduled to close the CDMA network on January 28 but will
now have to report to the minister within two weeks detailing remedies to
the problems he has identified. The earliest the minister will allow it to
be closed is April 28.

Senator Conroy said the key factor was concern about the coverage of NextG
mobile phone handsets. "In some cases, customers have purchased, or are
purchasing, NextG handsets and equipment that do not provide equivalent
coverage," he said.

A report from the Australian Communications and Media Authority found that
six NextG handsets - which it did not identify -appeared to provide less
coverage than CDMA phones.

A separate Communications Department report revealed some customers had not
received appropriate advice.

After a poisonous relationship with the Howard Government, Telstra opted for
a rare display of diplomacy yesterday. The company's outspoken regulatory
chief, Phil Burgess, said the decision provided clear direction about how to
ensure the transition to NextG was completed.

However, the decision appears certain to leave the Government and Telstra at
odds before they go into the highly charged talks over a national broadband
network, possibly starting next month. Telstra has rejected forming a joint
venture, which has been a key plank of the Government's plans to pour $4.7
billion of taxpayers' funds into the project.

Asked whether the decision set up a confrontation, Senator Conroy told the
Herald that he was treating the CDMA issue as separate from others and he
hoped Telstra did the same.

The minister also said he would announce details of plans for the $8 billion
high-speed broadband network within the next few weeks.

The National Farmers Federation said the delayed CDMA shutdown was a relief.
A survey by the group last month found "significant and substantive
concerns" among farmers with the CDMA network.

"It's sensible to extend the shutdown deadline by a few months," the
federation's president, David Crombie, said. "The critical issue has been
timing."

Telstra will not say how many customers are still using the regional
network, but analysts estimated as many as 500,000 at the end of December.
In November, Telstra said it had "several hundred thousand customers".

The Consumer Telecommunications Network, a customer lobby group, said there
had been an increase in calls in recent weeks from rural customers concerned
about the switch-off.