Cost of calling mobile phones cited as further evidence of Telstra's power

Stuart Corner
Friday, 14 November 2008 10:50

IT Policy - Government Tech Policy

He said the ACCC had "ignored Telstra's world-leading cost model to set ULLS prices 50 percent too low and...ignored its own cost model and set MTAS prices 50 percent too high. The only consistency about the ACCC decisions is that they ignore cost models, dream up a price that has no empirical basis, and short-change Telstra's shareholders."

Any reduction in the MTAS fee would advantage Telstra as the largest integrated carrier since, as the ACCC has demonstrated, it is able to retain retail prices regardless. However, it would reduce revenues for other carriers, especially mobile only carriers like Vodafone and 3 that have no fixed line customer base.

Quilty claimed that: "This week's trifecta of arbitrary ACCC decisions provides absolute proof why the telecommunications regulatory regime needs to be urgently reformed if Australia is ever to encourage efficient private sector investment in the networks that will drive our future economic prosperity."

Forman agreed, but his view of the direction regulatory reform should take was radically different. He claimed that the ACCC's document was yet more compelling evidence of the need to structurally separate the access component of the future National Broadband Network from service provider, especially Telstra.

"This situation will become even worse if Telstra is able to win the right to build the national broadband network without separating its network from its retail business...If the Government needs any more convincing that the time has come for structural separation of the telecommunications industry in Australia, consumers should use today's new data from the ACCC to drive home the message."

According to Forman "[Australia has] the world's most powerful and profitable telecoms incumbent in Telstra, and the weakest competition in the developed world."