| ACCC slaps competition notice on Telstra |
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| by Stuart Corner | |
| Thursday, 13 April 2006 | |
  
 The ACCC has issued Telstra with a competition notice following Telstra increasing the price of its Home Access product, used by its wholesale customers to provide line rental and local call services.The price increase resulted in Telstra's retail prices for the line rental component of the majority of its fixed voice products being below its wholesale price for line rental. The ACCC said that the price increase would likely deter Telstra's wholesale customers from competing for certain types of retial customers, would reduce the incentives of Telstra's retail competitors to compete for new or existing customers and would reduce the ability of Telstra's retail competitors to expand product offerings and invest in infrastructure. The competition notice allows third parties to take action to seek to recover loss or damage for certain anti-competitive conduct that occurs while the notice is in force. The ACCC said further action would depend on a number of factors, including the outcome of the continuing investigation as well as any action taken by Telstra in response to the notice. The Competitive Carriers Coalition (CCC) said the ACCC was to be congratulated "for standing up to Telstra's bullying tactics and anti-competitive behaviour". Telstra last November moved to increase the price for line rental for any customer that chose another telecommunications provider, and has since acted to increase prices for phone calls and broadband. According to the CCC executive director, David Forma: "This is a clear pattern of attack by Telstra designed to use its enormous market power to force consumers to buy all their services from it and no-one else. It is crucial that the ACCC now act quickly to follow up today's move by taking court action to have Telstra fined for its behaviour." According to the CCC, "[Telstra's] strategy is very clear – kill competition and turn the clock back to the bad old days where it was the only telco in town." The CCC presented a comparison of the profit levels of a range of international carriers, claiming that "Telstra has profit margins today that are second only to China Telecom among its international peers. Yet it wants more – profit margins of up to 52 percent in a few years." Telstra released to the ASX the ACCC's press release announcing the competition notice, but has so far made no other comment. |
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