Howard meets Telstra as big day looms for profits, plans

Sol Trujillo

CANBERRA - Telstra chief Sol Trujillo will meet Prime Minister John Howard today as the Federal Government considers the planned A$30 billion-plus ($33 billion) sale of its stake in the company.

The Government is due to decide whether to approve the planned sale of Telstra, which is likely to take place late next year. Legislation to approve the sale will probably be introduced to Parliament before the end of the year.

"It's entirely appropriate that the Government as a major shareholder is talking to the company on a range of issues on an ongoing basis," a Government source said.

"Clearly at the moment, there's a number of issues that impact on the company."

The meeting will follow the release of Telstra's full-year results in Melbourne and comes after critical comments of the telco regulatory regime by Trujillo last week.

Ensuring telecommunications services and prices in country areas match those in the city is a sticking point in the Liberal/National coalition Government's attempts to sell its 51.8 per cent stake in Telstra.

The coalition won a single-seat majority in the upper house of Parliament at the last election, giving it the most powerful mandate of any Government in the past 25 years.

But the rural-based National Party, the junior Government partner, has demanded that a A$2 billion fund be set up for country telecommunications.

Howard and Treasurer Peter Costello have said they will consider the idea, while Trujillo supports it as it could lessen the onus on Telstra to maintain rural and regional services.

- REUTERS