| Competition Tribunal throws out Vodafone pricing |
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| by Stuart Corner | |
| Thursday, 18 January 2007 | |
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Vodafone had proposed the price for the service should trend towards a proposed target price of 16.15 cents per minute in 2007, while the ACCC has maintained that 12 cents per minute was the appropriate price for the period up to 30 June 2007. However the ACT's vindication of the ACCC's decision will no have an immediate effect on the price Vodafone charges other carriers for terminating calls to its customers. That price must now be reached by negotiation between Vodafone and the other carriers and where commercial agreement is unable to be reached, it will be subject to arbitral determination by the ACCC. The price determined is likely to reflect that set by the ACCC, but the process takes time. The Tribunal said it was not satisfied that: Vodafone's costs were efficiently incurred; that the costs produced in the model prepared for Vodafone by its consultants generated an accurate cost of providing the MTAS; and that Vodafone's proposed prices would do no more than cover Vodafone's costs of supplying the service. The Tribunal noted that: "This is another instance where Vodafone has not done all that it might have reasonably done (prepare an estimate of staff time or conduct a headcount) to demonstrate that its expert's opinion is to be preferred to that relied on by the Commission." |
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