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Telecommunications Primus scores $8 million refund from Telstra
Telecommunications Primus scores $8 million refund from Telstra | Primus scores $8 million refund from Telstra |
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| by Stuart Corner | |
| Thursday, 10 January 2008 | |
  
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The ACCC has determined a price for ULLS services for Band 2 (metropolitan areas where most Primus customers reside) of $14.30 per month, compared to Telstra's proposed charge of $30.00 per month and a price for the LSS of $2.50, compared to Telstra's proposed charge of $9.00 per month. The determinations take effect on January 10 and are back-dated to February 3, 2006 for ULLS and to October 9, 2006 for LSS. As a result, Primus says it expects to receive refunds from Telstra in the range of $7.0 million to $7.5 million plus interest of approximately $0.7 million. At current customer levels, Primus says its recurring costs will be reduced by approximately $3.0 million per year. A decision in July on a similar dispute between iiNet and Telstra gave iiNet a $16 million refund and savings of almost $1 million per month on its then current customer base. There are also a number of similar disputes between other service providers and Telstra still being arbitrated by the ACCC. The ACCC's website lists these as being, for the ULLS: Optus, Chime Communications (iiNet), XYZed (an Optus subsidiary), Powertel and Request Broadband (both now part of AAPT), Macquarie Telecom, NEC Australia (Nextep), Adam Internet, TPG Internet, Agile (Internode) and Soul Pattinson Telecommunications (Soul); and for the LSS, Chime. Ravi Bhatia, managing director of Primus Australia, said: "mandated competitive wholesale pricing is critical to Primus's ability to continue to offer Australian consumers a choice of outstanding high speed broadband services at attractive and affordable prices. Moreover, the final determinations also allow us to make investment decisions to expand our broadband service portfolio and coverage and offer higher speed broadband services." The ULLS determination expires on June 30, 2008, and the LSS determination on July 31, 2009. Although Telstra cannot directly appeal the final determinations, it may seek judicial review of the ACCC's decisions. Primus says that it expects the ACCC to publish indicative prices in early 2008 to provide a basis for pricing beyond June 30, 2008. These are likely to be similar to the prices in the determination |
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