Essay on "Telecom Ethics Ethical Considerations Move Beyond"

Essay 5 pages (1430 words) Sources: 7

[EXCERPT] . . . .

Telecom Ethics

Ethical considerations move beyond the narrow confines of segment or business level strategies. For the players in Australia's broadband industry, there are potential ethical dilemmas that therefore need to be addressed with a corporate-level ethical code and system. This paper will explore two of the firms involved in the broadband industry in Australia -- Telstra and Optus -- with respect to their ethical programs and attempt to make some connection between these and their respective broadband strategies.

Telstra

Telstra is in a unique position in the Australian telecommunications company, as the incumbent player. This position has made it a target for government agencies that have taken a decidedly anti-Telstra stand (Datamonitor, 2010). Arguably, by contriving to bar Telstra from entering competition the government is the player in broadband with the biggest ethical dilemma, as in their misguided zeal to protect consumers they are reducing competition. That said, Telstra needs to develop an ethical framework for its pursuit of a broadband strategy.

Telstra aims to be a dominant player in broadband in Australia. In regular hardwire telecommunications, Telstra owns the line and is obligated to rent space on this line and provide means to competitors to enter into the market. Because the physical infrastructure is a form of competitive advantage, it does not make business sense to rent out this infrastructure to competitors. Government resolves this dilemma by way of setting laws compelling Telstra to sell these lines. With respect to broadband, the Australian government has excluded Telstra from building the national broadband network (NBN) which removes this particular ethical dilemma (Datamonitor, 2010). However, Telstra does have control over the cable that will carry broadband information to Hawaii, from which it connects to North America (Datamonitor, 2010).

Telstra also has the largest network for wireless broadband, the Next G. network, with coverage of 99% of Australia (Datamonitor, 2010). Wireless broadband, however, can be replicated by other competitors so there is limited risk of Telstra encountering an ethical dilemma as the result of withholding access -- other firms will simply build their own networks.

In fixed line, Telstra's old network is aging and it is struggling to cut a deal with the government to gain access to the NBN. The government is further threatening to split Telstra, which would be devastating to the company's business (Taylor, 2010). As a result, the ethical dilemma presents itself with respect to protecting Telstra's shareholders. Management would be right to perceive a petty spiteful attitude on the part of the government with regards to the company but it must counter its desire to combat that with its obligation to protect the shareholders.

Optus

For Optus, the ethics are perhaps more straightforward. The company has little infrastructure that would it would be compelled to rent out to competitors and is not at odds with a truculent government. The company merely has its ethical obligations to the shareholders to consider. Optus management owes a duty to shareholders to maximize profit and it also owes a duty of care not to harm other stakeholders in the process of pursuing that profit.

Both firms are subject to the typical ethical issues involving internal fraud, bribery, and accounting irregularity. That these issues can occur at an organization at any point in its operations and in any division indicates that a standalone ethics policy for the broadband business would not be sufficient -- the ethics program and policy must cover the entire company.

Optus is shifting its broadband strategy towards wireless, in which it has its own network. Fixed-line broadband growth has stalled, and wireless broadband has begun to increase in volume rapidly. Optus' current broadband strategy for broadband is to take customers that it has on Telstra's wholesale network and convert them to the proprietary DSLAMs. This is because fixed line broadband has become saturated so Optus wants to maximize its own network capacity. To increase market share, Optus has lowered its prices in an attempt to reduce customer losses to smaller ISPs and bring them back to Optus (Winterford, 2010).

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