SUBJECTS: Telstra job losses; SBS budget cuts and World Cup coverage.
SABRA LANE: Well it hasn't been a great week for Australia's telecommunications companies. Telstra's revealed it’s cutting its workforce by a quarter, axing 8,000 as part of a major restructuring of the company. And Optus' efforts in broadcasting the World Cup, well that's flopped. Technical stuff-ups have left customers furious. SBS will now broadcast the remainder of the group games until the end of the month with refunds offered. What happens after that? We don't know yet.
We invited the Communications Minister, Mitch Fifield, to join AM today. He's declined so instead we're joined by the Shadow Minister, Michelle Rowland. Good morning and welcome to AM.
MICHELLE ROWLAND, SHADOW MINISTER FOR COMMUNICATIONS: Good morning.
LANE: First to Telstra, the ACTU says that Telstra should reinstate those 8,000 jobs and that it’s a betrayal. What do you think?
ROWLAND: Firstly, this is devastating news for those 8,000 workers. They're 8,000 real people with bills, with families, and it will be a very tough time for them. Certainly no-one wants to see job losses and certainly job losses of this scale. Telstra will have to explain the reasons for that. In its investor update yesterday it said that this was part of long term cost cutting measures over the next few years, but indeed it's something that no-one would want to see.
LANE: Do you think that those jobs should be reinstated?
ROWLAND: Well again, that's for Telstra to make up its mind. One thing I would point out –
LANE: I was just going to say, what did you think of that statement yesterday?
ROWLAND: Well look, one thing I would point out, and the statement had a couple of elements. The first and most notable one of course being the job cuts, it said that those job cuts would be in management positions, so a flattening of the management structure, and Labor's concern is to ensure that that doesn't impact on consumers and on customer service. Now again, that's a matter for Telstra to manage but that's something we should watch very closely, and we should also ensure that all of those affected workers have their full entitlements provided to them. And Telstra has given assurances to that effect.
But you're right Sabra, it was a very widely anticipated investor update. The headline has, of course, been the unfortunate scale of those job losses; that they occurred but also the scale of them. The other is Telstra's looking at simplifying a lot of its products. So they have something like 1,800 current products; scaling that back amazingly to about 20 and part of the rationale that I see in their announcement is 'look, we're going to make it easier for people to deal with us and therefore that should lower the number of complaints, should keep customers happy.' If that is executed well, Sabra, then that will be a good thing for consumers.
LANE: You're sounding sceptical?
ROWLAND: I would be sceptical in the sense that if these job losses actually go towards delivery of that then that would not be a good thing, but again that is for Telstra to explain.
LANE: Andy Penn, the CEO, says that the company is leaving the past behind and it's at a major tipping point. Do you agree?
ROWLAND: Where Telstra finds itself is in a position of coming off being, of course, a vertically integrated operator, now in a highly competitive market. We've got the entry of a new mobile operator in TPG, so highly competitive, margins are taking a hit and yet on the horizon there is the prospect of 5G. A lot being pinned on 5G, which is a couple of years away, and the application of 5G into the Internet of Things is a couple of years away as well. So they find themselves in this stage where they need to have a strategy to detach themselves from the past and yet somehow align themselves for the future. So that is the real challenge they are in now.
LANE: Okay, onto Optus and the World Cup snafu. Under a Labor Government, would you ensure that all World Cup matches are available on free-to-air?
ROWLAND: Well, if you're going to the issue there, Sabra, of the anti-siphoning list, the anti-siphoning list really didn't play a role. I think we just need to make that clear. The deal that Optus did with SBS and the rights around that are –
LANE: A little bit complex.
ROWLAND: A little bit complex indeed, but they were all permitted under the anti-siphoning regime. What I would note is that for decades Australians have enjoyed this on the SBS. The SBS has been the home of the World Game. It has marketed itself as such and I think it has been widely appreciated by football fans around Australia. The problem we had here was that some years ago, the government was warned that its cuts to the SBS would have consequences. They were warned several times. Michael Ebeid even made it clear that they would have to look at making savings. And so when it came to the 2014 Budget and they had those cuts, clearly they had to look at making some savings and doing some deals, which ultimately was the genesis for where we are today.
LANE: But there isn't an endless stream of money that can go to the broadcasters. Ultimately, that was SBS's decision to on-sell part of the rights to Optus and Optus has copped huge brand damage over this so surely doesn't the responsibility lie with Optus?
ROWLAND: The interesting thing point here – I think there's two really interesting points. The first is the hero that's come out of this in the last couple of days in particular is good old free-to-air linear TV provided by a public broadcaster, and so much for people who said linear TV was dead. For time-critical events such as live sports, SBS has really been the shining knight which has been very interesting. But also, the way in which, you know, Optus has had to manage this is quite telling. They had some problems initially with their EPL offering and we know that telco’s are moving more and more into that content space, including the sports space. But to then come back and say, “well we're going to have the rest of the group rounds simulcast with SBS,” I think demonstrates that they recognise the value of the platform. They've also gone, what they would say is, out of their way to compensate fans. I think there's going to be full refunds. There's also going to be Optus Sport, I think, provided for free for a couple of months. So, as you say, there has been brand damage, and they've really had to go in hard to back their platform, whether it's by demand or by design that those problems happened, I think they'll continue to investigate.
LANE: Michelle Rowland, Shadow Communications Minister, thank you very much for joining the program this morning.