Blunt message for Canberra

Telstra's ability to compete against rivals would be compromised if the Australian Government imposed heavy-handed competition laws, according to new Telstra boss Sol Trujillo.

He delivered the blunt warning at a dinner with Australian Communications Minister Helen Coonan and Finance Minister Nick Minchin last Tuesday, a report says.

Telstra is battling to avoid the imposition of what it sees as unworkable regulations that would curtail its ability to compete once it is fully privatised.

The warning reinforces views that the A$30 billion ($33.7 billion) sale of Telstra could yet face hurdles, despite the Liberal-National Coalition's dominance of the Senate, the report says.

Trujillo's warning comes as debate continues over the sale of the Government's remaining 51.8-per-cent share in the national telco.

Queensland National MPs met on Sunday to formulate a five-point plan they believe must be met before the sale goes ahead. This includes a multibillion-dollar rural trust fund for service upgrades, and service parity between the bush and cities.

- NZPA