Speaking at UTS today, O'Sullivan said that where competition is scarce, development is slow — and he sees "dark clouds on the horizon" for telecommunications innovation, as a result of the AU$4.7 billion national broadband network (NBN).

He urged the academic community to raise their voices on the structural issues of the national broadband network as it will have a "significant impact on the degree of innovation" and therefore affect future engineering graduates: "I would strongly encourage those in the room ... to be looking at structural issues as well as technology issues," he said.

"I think we far too often get caught up in technology and innovation and forget about market structure," he added.

The network shouldn't be owned by any one player, according to O'Sullivan, or "inevitably there will be higher prices and less innovation."

"What Australia is doing now will develop the competitive structure of the broadband market for the next 10 to 15 years," he continued. "Given Australia's size, population density and natural monopoly, the reality is there will only be one national broadband network."

As a result, says O'Sullivan, operational separation is a must: "If Telstra will not accept this, there are plenty of other bidders who will."

Optus is not the only voice calling for a split: the states have already expressed their desire that Telstra undergo structural separation if it wins the bid.

Telstra on the other hand, says international examples show that operational separation inhibits innovation.

"With forced separation, you don't see investment in infrastructure and innovation," a spokesperson said: "The company doesn't have any reason to keep building and innovating on the network. It just has not worked anywhere in the world."