SUBJECTS: Telstra job losses; Malcolm Turnbull’s second-rate NBN in WA.  

CHRIS ILSLEY: Michelle Rowland is the Shadow Communications Minister and joins us on the phone tonight. We appreciate your time Michelle, thanks very much for that. 


ILSLEY: What's your take on all of this? Is this about Telstra just simply making itself a leaner, more efficient 21st century organisation or is it just simply slash, burn, cut, gut and shut? 

ROWLAND: Look, I think there's two parts to it. Firstly, as you described, 8,000 jobs, they're 8,000 real people. It's one in four of the management level of their workforce so it's a significant number of people. I think you're very right to focus on the issue of customer service though because, whilst we're not aware of how much this will go into the frontline and customer facing staff, we don't know geographically where these cuts will be. It certainly is the case that the market is very competitive, especially in the area of mobile. But people, they not only chose and stay with a provider based on price, it’s also non-price, so things like the level of customer service you receive, so I'm sure that would be bearing very heavily on the minds of Telstra at the moment.

But I mean the other side of it to is, as I described, the market has changed a lot. We no longer have this situation in what would've been good old days for Telstra where they were this vertically integrated operator, they had their fixed line services, where they had the wholesale and also controlled the retail side of it. It's much more difficult for them now. They're essentially a retailer competing on a level playing field with everyone else. So certainly the market has changed dramatically.

ILSLEY: Oh there's no question the market's changed and I suppose they also have to respond to it. Is part of the problem, do you think, for Telstra that there are still shades of the old Telecom Australia there, despite the fact that that was very much a 20th century entity as opposed to the 21st century entity that we have now that has to compete with world operators? When we look at Telstra, is it really effectively becoming an anachronism?  

ROWLAND: In some ways I agree with your analysis because certainly the old world that Telstra used to operate in, that's long gone. But Telstra, like every other operator, is now trying to find where it goes from here and for Telstra it's stuck between this old world that got left behind where they were quite essentially a monopoly provider in some of these areas, and we're not quite there yet with the next wave of technology. And I'm sure you and your listeners would've heard of 5G and the Internet of Things, so we're not there yet with that phase of technology and Telstra really needs to position itself to say, "well look, between now and then when we think that there will be really good growth, what do we do?" So they've looked at a couple of measures, some of them obviously very unfortunate for their staff. And other areas, I think, the market has welcomed what they've done. Things like simplifying their product lines to help make it less complex. And if that's executed well there should be upside for consumers. But it's a difficult and challenging time for Telstra to know where it wants to be now, particularly when you consider where the old world was – 

ILSLEY: Perhaps also where it needs to be. It's one thing to say "where do you want to be?" One of the first assessments I think nowadays you have to make is where do you need to be and sometimes that's maybe not an easy question to provide an answer to?

ROWLAND: You're absolutely right, and Telstra has gone from thinking, "Look, we're not just going to be an infrastructure provider anymore, we're going to be more of a technology company,” and they're needing to re-position themselves on that spectrum, and they've got shareholders and the market looking at them very closely and examining these outcomes. So it certainly is challenging for them. I think the real test is what does it do for the long-term interests of customers, how is the customer experience impacted.

ILSLEY: Well, I mean, the customer experience isn't there anymore, but I think to be fair, I think that probably all telephone companies are not that flash at looking after customers. I think what's happened is Telstra went from a point where it provided very good service, perhaps in some respects people could argue it over-serviced. It’s now gone to the point where it's just like everyone else. It's providing the barest minimum it can get away with, usually through cheap as chips overseas call centres with people with accents we can barely understand and that's a reality. And all that does is leave a whole pile of frustrated customers around the place. But I also note that part of the whole plan here is to, and the quote they use here is 'split off old infrastructure into a separate business'. Now I find that quite interesting because I wonder if some of this old infrastructure is something at some point that they actually foresee themselves shedding. Whether they shed it by selling it or whether they shed it by looking at it and saying it's not something we need anymore, it's not part of our business plan, and they just simply shut it. I really don't know. But I must say that I find that particular line very, very interesting.  

ROWLAND: Well, part of the speculation here is they have indeed created a separate business unit for the infrastructure assets. They're calling in InfraCo. And look, what this looks like is it's leading to what analysts have described as the ability to move into a position for perhaps even potential acquisition of the NBN by Telstra. So this is a separate company that is purely holding infrastructure assets. It leaves the potential for ring fencing of fixed line assets within the company and the term that Telstra's been using in this is to preserve "optionality", following the completion of the NBN. 

ILSLEY: Oh, these phrases people use. 

ROWLAND: Exactly. 

ILSLEY: They just do my head in. We're having a conversation with the Shadow Communications Minister, Michelle Rowland, who would be Communications Minister, I would imagine, in a future Shorten Government. Can we move to the NBN?

ROWLAND: Certainly.

ILSLEY: And here in Western Australia it's been dubbed 'no bloody network,' and there are a lot of people frustrated about it. One of the other issues, I guess, we're facing, you made some mention about things like 5G and what have you. There are some people, including our technology guru on this program, Ben Aylett, who are suggesting that part of the problem with things like the NBN is it may actually be being chased by emerging and new technologies to the point that by the time it's finally rolled out it might be redundant. 

ROWLAND: Well, 5G is an emerging technology which will be quite transformative and there's been debate about whether 5G will be a substitute for fixed line services – 

ILSLEY: Oh there's a question mark there.

ROWLAND: - such as that being provided by the NBN. I think the important thing is to put this into perspective. 5G networks are indeed different from fixed line networks and I think quite a while ago the issue of whether they were substitutes, or what we call complementary to one another have been resolved, because really they perform two different functions. The vast majority of broadband traffic is carried over fixed line networks, but the very interesting point that your colleague would've been making.

ILSLEY: I guess the question we have here though, Michelle, is is that logically going to change. I mean you look at so many people know, they do their internet, they do all sorts of stuff on their mobile phone, which is a wireless connection, whether they're doing it by their own wifi or whether they're onto some sort of network system that might be offered around the place, that doesn't matter. But more and more people seem to be going to that. The concept of somebody, say for example, sitting down at a PC, that's almost technology that's moving on itself. It's really hard trying to predict where this is going to go into the future.

ROWLAND: Indeed, and your remarks are very astute in that respect that sometimes, where you have unreliable fixed line services, such as where there's a propensity to have copper, which is unreliable, people will switch to a more reliable option. And it's in those areas that the NBN risks being exposed to new services such as 5G. And in that respect, it is a real challenge when it comes to Western Australia because Western Australia is scheduled to receive more copper under the NBN than any other State or Territory in the country. 

ILSLEY: And the problem is the copper they're retaining is in areas that, to be quite blunt, was in the ground when Ben Chifley was Prime Minister. 

ROWLAND: You're exactly right, and I remember seeing some of these examples being over there with Alannah MacTiernan when she was here in Canberra some time ago and we went and spoke to a number of constituents who said exactly that. So where you have an unreliable network that's being serviced thanks to copper, it's there that 5G is really going to be that threat to the NBN.

ILSLEY: Well can I put something to you Shadow Communications Minister. In my suburb we have HFC, you're familiar with that, hybrid fibre and coax. And we got a not that we were going to the NBN, which I thought "gee, why did they do us", because I knew, talking to people on this program, there were people, including people who are much closer to the CBD than I am, who had really bad ADSL. I mean it was not much better than the old dial-up and they really needed the NBN. And look, to be totally honest with you, our HFC was really good. And, you know, it was one of those things where I'd have to argue on the basis of pure need there were suburbs in far greater need than we were and I put an FOI into NBNCo to find out whether the NBN was coming on the HFC or on the copper cable. And I was aware of a court case in Sydney that had taken place with a block of units over this very issue and I didn't get a response but we did end up with a note saying that in our area the NBN connections had been suspended until further notice. Now I'm not so arrogant as to believe I had some impact, Michelle, but I certainly think I might've asked a question that made a few people uncomfortable. 

ROWLAND: Well towards the end of last year, the HFC network was being plagued by significant problems, which led to NBN putting a pause on new connections for HFC. So, that could've been part of it, I'm not sure if you were part of that but certainly one of the big complaints that I've been hearing from people is, you know, "before the NBN came I had a perfect working internet connection and since it's come I've got a really rotten one, can I switch back to what I had before?"

ILSLEY: Well, the big problem that we've got, I mean, when we went through this whole process and I said to my wife at the time, well we've got 18 months from now to convert, otherwise we'll lose the whole lot and she was a bit nervous because the whole system was working fine. This reset the clock, and I found out from NBN, and Bernadette's first response was to say "Thank God for that." The reason being because we've got a system that's working really well, I mean we have fast internet. We have one of their cable liberty plans it's called. Works beautifully, and you can sort of understand why somebody would be saying "why do we have to change this when we've got a system that's working perfectly fine, yet a bloke up the road from me came and said a couple of times, "Can you come and have a look at my internet," and he's on the NBN and life is not fun for him and he's not a happy man.      

ROWLAND: No, well unfortunately that's the case that we're hearing right around Australia and certainly I've heard that in WA when I've been over there myself, that people are gravely disappointed with what they've ended up getting. And that's a real shame, because the state of Western Australia needs to have high speed broadband, they need to have reliable services for everything across your economy, whether it be for health needs or for kids studying, it's simply unacceptable that in 2018 we've got sub-standard internet. 

ILSLEY: And it should, of course be done on the basis of most need. That's the other thing. The people who need it most should get it first. I mean, those suburbs, we've got suburbs here, like I said, that have got copper that's in the ground that quite honestly is rotting from its own age and of course because everyone's been penny pinching nobody's bothered to replace it. And this actually goes back to Telstra as well, they never bothered to replace it because they would just extend it and extend it and extend it as much as they possibly could. And in fact, often the only time cables were replaced when people put in new subdivisions and people were forced to replace it because they simply didn't have the capacity on what was already there. 

ROWLAND: Yes certainly, and it's an incidence that we hear right around Australia unfortunately. 

ILSLEY: It's frustrating. Michelle Rowland, I know you're busy, I appreciate your time.

ROWLAND: It's my pleasure, thank you.