Telstra refutes competition notice

Stuart Corner
Thursday, 13 April 2006 18:50

IT Policy - Regulation

See also ACCC slaps competition notice on Telstra.

Telstra has hit back at the ACCC's competition notice issued over the price of its wholesale line rental service, claiming the price is fair and reasonable.

Telstra said it was confident the price it charges wholesale customers for a basic line product called Home Access is reasonable, and that an increase last year was necessary to "help maintain the country’s national copper access network", despite the fact that this network is wholly-owned by Telstra.

Telstra group manager of regulatory affairs, Dr Tony Warren, said the increase in the Home Access wholesale product by $3.10 per month to $27.60 per month (excluding GST) was fair "given the way competitors use it as just one component of a larger bundle of services they offer end-user customers". He claimed that, over the bundle, there was sufficient margin.
"The comparable retail plan to Home Access is HomeLine Part - which Telstra increased by $5 per month to $31.95 per month (GST included) shortly before it increased wholesale Home Access by $3.10.

Telstra's argument, according to Warren is that when a wholesale customer uses a basic access service like Home Access to provide its own value-added services, the access charge is the only guaranteed income Telstra recovers, so: "It is only fair to Telstra's other customers and its shareholders that wholesale customers make an appropriate contribution to the maintenance of the network given they are making profits from providing services on the Telstra network," Warren said.

"Telstra believes that the ACCC's intervention in this very competitive market is unnecessary and only serves to create uncertainty for wholesale customers and their pricing. He said that Telstra would "strongly defend its position".