Roadhound MD attacks Telstra’s Brightstar deal

Roadhound Electronics' managing director Ben Sharma has crticised Telstra's distribution contract with Brightstar alleging it was a "back door deal."

He questioned the fairness of the contract, which gives Brightstar exclusive rights to manage Telstra handsets to its dealers. Roadhound is a large mobile phone distributor.

Sharma - a Telstra shareholder - was unhappy with the way Telstra glossed over how the deal came about with Brightstar and believed Telstra should have gone through a process where it tested the market.

“Telstra said it had approached other organisations in Australia. Yes we were approached in December [and] we were asked by them to provide some information on my company.

"They said to us “Guys can you do this? We don’t need any facts and figures.”

"However it was all a waste of time. I don’t even know why they asked since Telstra makes it clear it had already been sniffing around Brightstar around October.

“All I’m saying is it’s got to be a fair and level playing field. Telstra claims it has no intention to lock the channel up. At the end of the day however, dealers and partners must buy Telstra phones. This will allow Brightstar to achieve a rebate - without this it won’t make any money.”

Responding to Sharma’s comments, a Telstra spokesperson said the telco has no legal obligation to go through a tendering process.

“Other proposals were considered as potential partners for this agreement.”

The spokesperson said Brightstar has been providing Telstra with wireless devices from global suppliers, at more competitive prices, since an agreement in October last year. “There is no conflict of interest; Brightstar can provide the logistics Telstra needs.

“Telstra feels this agreement will deliver the best possible results and provide significant cost savings. We are confident about appointing Brightstar to manage our supply chain. This is the best decision from Telstra."