Telstra forced to separate ahead of T3 share sale

Telstra will be split in two, with distinct network and retail divisions that must occupy separate premises and have separate management but may be owned under the same company structure. The federal government will regulate to enforce the structural, but not legal separation, of the company. The government will then seek to sell its 52 per cent stake in the company. A proportion of shares will be dedicated to a “communications funds”, the interest on which will pay for subsidies for service upgrades in the bush. Some of the balance may be transferred into the “future funds” intended to fund public sector superannuation liabilities. This means the proportion of the government’s stake to be sold is unclear. Any Telstra share sale is likely in late 2006.