Resellers expect better products from a split Telstra

Australian IT and telecommunication service providers have applauded the Federal Government's proposed legislation to structurally separate Telstra into two distinct wholesale and retail entities.

Service providers believed the breakup of the telco giant would force the telco giant to work harder at providing customers with better services and products. 

Chris Herrmann, managing director of Sydney-based IT integrator Far Edge Technology  told CRN the proposed separation would be positive for his business.

"My ability as a systems integrator in the SME space to influence Telstra is non-existent," he said. "[This] leaves my only other option of buying enough Telstra shares to influence the board - not likely to happen either."

However separation of the telco would force "Telstra to work better with other ISPs", which in turn would allow businesses like, Far Edge, offer its customers a better turn-around time on telco projects, said Herrmann.

"For example if there's a problem or something needs to be installed, we use Pacnet - who in turn relies on Telstra," he said. "If Telstra don't play nice or have a bad hair day then getting anything done is like having teeth pulled out. However when the telco is having a good day then its [services] are great."

He believed more competition would make Telstra lift its "game" and provide better services for customers.

"In exchanges where competitors have their own infrastructure Telstra is often forced to lift its game," he said. "Both in the service level they provide, as well as in making it available to the wholesale market.

Damian Kay, managing director of Telcoinabox told CRN the separation of Telstra would have very little impact on an aggregator/reseller such as Telcoinabox.  

However, Kay claimed one of the biggest transformations that functional separation would provide was better product development and innovation. 

"Telstra Wholesale is very poor at making [products] reseller friendly," he said.  "[It's] products are often complex and configured for "builders", like network operators. 

Kay believed the product managers at Telstra Wholesale have very little understanding of the requirements of resellers. 

"Telstra Wholesale has embraced the reseller market in the last few years but product innovation still lags behind this strategy," he said.  "I believe separation will lead to [it] to streamline the product area and bring innovative offerings to its vital reseller channel."

Kay said the constant broken record of, "sorry you can't have that as it's a retail differentiator" would have to be a thing of the past. 

"Telstra Wholesale will need to compete with the market including its own retail channel and [give] [resellers] access to [inaccessible] products and services," he said. "Even better, we may also finally see basic access provided on a retail-minus basis to allow for the true costs of rebilling these products to end users."

Kay said it was constantly "hammered' by its 120 resellers about the difficulty of offering services that are "re-billed" to them through Telcoinabox from Telstra.

"[It] costs them money to provide [the service to] their end users and they wear all the costs to serve,"he said. "Separation holds the hope that this may change."

John Lindsay, carrier relations manager at Internode told CRN the ISP welcomed the proposed legislation because it correctly addressed most of the issues relating to competitive fixed line in the telco sector.

He believed separation of the telco giant - whether functional or structural will help to ensure retail prices remain affordable and the "breadth of services" remain wide.

"Moving the Access Price setting regime to 'price setting' rather than 'negotiate, arbitrate, litigate' will dramatically increase certainty for access seekers and reduce our legal bill significantly," said Lindsay.