It's official: Telstra's charges are too high

The Australian Competition and Consumer Commission has officially rejected Telstra's proposed wholesale connection charges for competitors, after almost a year of review.

The consumer watchdog yesterday released its final decision on the investigation into Telstra's wholesale proposed costs, with only slight amendments to the draft decision released in April.

Competitors using Telstra's wholesale service should be paying on average 1.77 cents per minute for 1999-2000 and 1.53 cents per minute for 2000-2001, the ACCC said.

Telstra proposed that its own charges be 2.37 cents per minute for 1999-2000 and 2.01 cents per minute for 2000-2001. In April, the commission said the charges should be 1.8 cents per minute for 1999-2000 and 1.5 cents per minute for 2000-2001.

"Confirming a draft decision made in April this year, the ACCC's final analysis shows that Telstra's competitors are paying too much for the use of its network," Professor Allan Fels, chairman of the ACCC, said yesterday.

Competing carriers use Telstra's fixed-line telephone network to supply long-distance, fixed-to-mobile and mobile-to-fixed calls to consumers. According to the ACCC, the cost of Telstra's wholesale service is between 30 and 45 per cent of competitors' total costs.

According to a statement released by the ACCC, Telstra's proposed charges are around 30 per cent higher than the costs that an efficient operator would incur.

"Charging above cost for the use of Telstra's network hampers the ability of telecommunications service providers to compete with Telstra on the basis of their true merits. As a result, Telstra enjoys an artificial competitive advantage, which can only harm consumers over the long term," Fels said.

Carriers using Telstra's wholesale network service include Cable & Wireless Optus, AAPT, One.Tel and Primus.

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More about AAPTAustralian Competition and Consumer CommissionAustralian Competition and Consumer CommissionCable & WirelessOne.TelOptusPrimus AustraliaTelstra Corporation

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