Government Piles Pressure On Telstra

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The Australian government has come out with an unexpected threat to goad Telstra into conforming to its wishes on functional separation, reports Reuters. The government has for some time been trying to get Australia's fixed-line incumbent to separate its network and wholesale functions from its retails arm, in order to boost competition and further open up the fixed-line and broadband markets. Telstra has steadfastly resisted this pressure up to now, threatening to withdraw some valuable investments if the government moves to force the separation. It seems that Telstra may be considering backing down now, however, after the government has countered with its own threat to block Telstra's wireless expansion if it continues to resist.