Australia plans Telstra break-up to boost broadband

Australia on Tuesday announced plans to break up telecoms giant Telstra as it presses ahead with a 37 billion US dollar scheme to roll out high-speed broadband Internet across the vast country.

Communications Minister Stephen Conroy said Telstra, part-owned by the government and subject to strict regulation, would be forced to split into retail and wholesale units unless it agrees to do so itself.

"It is the government's clear desire for Telstra to structurally separate, on a voluntary and cooperative basis," he said.

There was no immediate reaction from Telstra, a former state-owned monopoly that owns the country's ageing copper telecommunications network and went mostly private in 2006.

Australia announced plans in April to build a 43 billion Australian dollar (37 billion US) fibre-optic broadband network which is expected to leave large chunks of Telstra's copper system redundant.

The plans, included in legislation to be submitted to parliament later on Tuesday, will also force Telstra to sell off its cable network and interests in pay TV arm Foxtel, and prevent it from acquiring additional mobile spectrum.

Telstra shares slumped 4.0 percent to 3.12 dollars shortly after the announcement.