Telstra business plan angers rivals, government

6 Feb 2006

Australia’s fixed line incumbent Telstra has further angered rivals and the government by ignoring the wishes of both and fixing the price of its wholesale unbundled local loop (ULL) product at an average AUD30 (USD22) a month. As the owner of the PSTN, Telstra must provide alternative operators with unrestricted access to its network, something which has been the source of extensive debate since ULL and wholesale products were introduced in 2000. Telstra is refusing to comply with the latest draft proposals for pricing from regulator the ACCC, which were published in June 2005 and suggest a sliding scale of ULL access prices as low as AUD7 in urban areas. Telstra says that charging any less than AUD30 would see it offering lines at a loss. Currently the telco offers ULL in major cities for AUD13, whilst rural access charges in the most remote regions can be in excess of AUD140. A Telstra spokeswoman told Fox News that the AUD30 charge ‘just about meets Telstra’s cost,’ and is a fair price.

The tariff change has been published alongside Telstra’s draft operational separation plan, which was released two months ahead of schedule and outlines how it intends to split up its business into separate wholesale, retail and network divisions before it it is fully privatised. Under the plan each unit’s premises and employees will be physically separated and limits will apply to information access by workers in the three units. The draft plan is open for public comment until 5 March. Telstra will then prepare a final plan to submit to the Communications Minister. David Forman, a spokesman for the Competitive Carriers Coalition, which represents Telstra’s competitors, branded Telstra’s plans a ‘joke’. ‘Any doubt that the new Telstra was committed to the destruction of competition and the defiance of the regulator and government has been swept away by its twin attacks today on broadband pricing and operational separation requirements,’ Mr Forman said.

Australia, Telstra (incl. Belong)