2009 Q2 News Headlines

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The objectives of Commonwealth Bank as the new owner of Bank of Western Australia may explain a large part of the drastic rise in bad-debt provisions for BankWest disclosed yesterday.

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Macquarie Group is seeking to sell $500 million in new shares to institutions and $200 million in shares to retail investors under a purchase plan, several newspapers reported today. Macquarie and Credit Suisse are leading the share sale.

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A syndicate of 20 banks will have to pay $1.58 billion to the liquidators of Bell Group, Judge Neville Owen of the West Australian Supreme Court ruled yesterday.

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THE Federal Court has found that Telstra misused information from wholesale customer, Optus, for its own marketing purposes.

Mitchell Bingemann | May 01, 2009

OPTUS has won a Federal Court ruling against Telstra in which it was alleged that Australia¿s dominant telco misused Optus' confidential information for its own marketing gains in the 1990s.

Optus claimed that in the period 1993 to 2000, Telstra breached an access agreement by obtaining confidential information about Optus’ long distance telephony traffic.

The traffic information, which included the number of calls made, the source of call, the destination, duration, time, kind of call and value, was used to track the success of Optus' marketing campaigns.

This information was provided by Telstra Wholesale to Telstra Retail where it was used to launch marketing and advertising attacks in the long distance call market in a bid to lure customers away from Optus.

The sharing of information between Telstra’s wholesale and retail arms also allowed the telco to monitor in real time, the success of Optus’ marketing initiatives and special offers.

“There can be no doubt that in preparing the market share reports Telstra used traffic information of Optus; certainly not every element of such information, but at least the aggregate quantity of Optus’ traffic that travelled over Telstra’s network ... perhaps more,” Justice Richard Edmonds said in his ruling.

Justice Edmonds ruled that Telstra is now liable to Optus for its breaches.

Optus said it would ascertain the extent of Telstra's breaches before seeking damages.

"This is another example of anti-competitive behaviour from Telstra. And it is more historical evidence of why Telstra should be separated as canvassed in the government's regulatory reform discussion paper of April 7, 2009," said Maha Krishnapillai, Optus corporate affairs director.

Internet service provider Internode said the ruling was strong evidence for the need to structurally separate Telstra.

“This is very ancient history and excellent evidence of why structural separation results in a more competitive environment by removing the opportunity for monopoly access providers to succumb to the temptation to eat their own (wholesale) customers,” Internode carrier relations manager John Lindsay said.

“Telstra must be structurally separated to prevent any recurrence of this behaviour and to remove any incentive for loading commercial agreements with clauses that provide Telstra with excuses for collecting marketing information to use unfairly against their own customers,” Mr Lindsay said.

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SAP users will make the software giant adhere to strict performance indicators in light of maintenance fee increases.

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Archive of all automated news feeds received in the last 3 months of 2008.

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Archive of all automated news feeds received in the first quarter of 2009

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Archive of automated news feeds received in the second quarter of 2009

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Further to our discussion last week on the prospects for a recovery in the domestic corporate bond market, we note that the view of ANZ’s economists on the outlook for short-term interest rates has already been supported by the Reserve Bank of New Zealand, with its 50 basis point cut in the official cash rate last week to 2.5 per cent and its comment that it expects the OCR will be kept at or below the current level until late 2010.

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Standard & Poor’s released its 2008 Australia and New Zealand corporate default and ratings transition study last week. S&P noted that the Australia and New Zealand rated corporate pool suffered its highest downgrade to upgrade ratio for five years, at 2.57 times.

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