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ACCC orders 9.4% price drop for Telstra fixed line access services

09 Oct 15

Telstra has been ordered to drop its prices by 9.4% across seven fixed line access services.

The Australian Competition and Consumer Commission released its final decision on prices that other Telstra charges other operators to use its copper network, saying downward pressures more than offset upward pressures in pricing.

Rod Sims, ACCC chairman, says downward pressures largely come from lower expenditures, falling cost of capital, the treatment of the effects of migration to the NBN and updated information on the NBN rollout.

“These more than offset upward pressures from a shrinking fixed line market due to consumers moving away from fixed line services and to mobile services,” Sims says.

“Importantly, users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs. If there is no adjustment for these higher costs then customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices for copper based services,” Sims says.

The decision of a fall of 9.4% revises the 9.6% fall estimated in a June draft decision. The new prices will apply from 01 November 2015 until 30 June 2019.

The seven fixed line services for which the price decreases apply are the wholesale ADSL service, unconditioned local loop service (ULLS), line sharing service (LSS), wholesale line rental (WLR), local carriage service (LCS), fixed originating access service (FOAS) and fixed terminating access service (FTAS).

The ACCC’s final decision also covers connection and disconnection charges and a decision to not exempt the CBD areas from coverage under the final access determinations.

Sims says the ACCC dealt with a number of complex issues during the inquiry, including the unique circumstances of the transition from Telstra’s copper network to the NBN.

The Commission says users of the fixed line network have not caused the asset redundancy and under-utilisation and will not be able to use those assets and capacity in the future.

“It would not be in the long term interests of end users for costs to be allocated to users of the network who do not cause them, particularly when Telstra has an avenue to recover those costs,” Sims says.

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