Australia’s telecommunication major Telstra may most likely yield to the government’s pressure to separate its network from its retail and whole units, in a move widely believed is to boost competition and lower down prices of internet.

The split, which will be channeled along the lines of break-ups of phone companies in UK and New Zealand, is also seen as a solution to help nullify stalemate looming over setting up a NZ$12.06 billion high-speed broadband network.

While the former state-owned company has aggressively rejected the need to split its business units, its rivals say it is the only way to ensure a level playing field.

The government’s decision on a possible split could come late this year, but the battle could drag into 2009 if Telstra fights the move in court.

Telstra remains a dominant player in the Australian market with 70 per cent of total industry revenues in the fixed-line market and a 48 per cent market share in broadband.