Enterprise phone bills fall but competition hits plateau

Large corporations in Australia have seen their phone bills drop by 5 percent, according to the Australian Competition and Consumer Commission (ACCC).

While SMEs have seen their phone bills rise by 3.1 percent, the ACCC said large businesses had their phone bills cut by 5.6 percent and mobile phone users, on average, have seen savings in the 3 percent range.

ACCC commissioner Ed Willett said greater competition between carriers has delivered savings in the mobile market.

Prices paid for pre-paid mobile services on GSM and CDMA networks dropped 5.6 percent and 4.3 percent, respectively.

For those on mobile phone bill plans, prices fell between 1 and 1.5 percent.

The latest update on phone bills came as the federal government yesterday tabled two reports by the ACCC on prices and the state of competition in the industry in parliament.

The report said despite increased competition the industry remained concentrated.

"Further market advances in terms of higher quality and more keenly priced services will only be likely if there is an increase in competition further up the value chain in facilities or quasi-facilities based markets," the report said.

"Without this development it is difficult to say that the competition currently in the market is sustainable."

However, Telstra said prices for its most popular telephone products have fallen by 17.9 percent since 1997/98.

"Telstra customers have enjoyed substantially lower prices for telecommunications services than almost any other product or service measured in the Consumer Price Index (CPI) over the past 10 years," a spokesman said.

"Australian Bureau of Statistics data shows, in that period, telephony prices increased by just 1.4 percent while CPI - the cost of living - had risen by nearly 30 percent, gas by 39.4 percent, electricity by 27.5 percent and food by 39.4 percent."

The spokesman said Australia's telecommunications market had never been more competitive, and Telstra now had more than 100 rivals. IT and Communications Minister Helen Coonan said the ACCC report will be carefully considered as part of the government's review of competition regulatory arrangements.

"In this regard, I note the ACCC's view that the rate of competition has stabilized and the benefits of access-based competition are beginning to plateau," she said.

At the same time, Telstra has been accused of trying to intimidate its smaller rivals by forcing the ACCC to hand over complaints it has received about the telco giant.

A Senate committee also heard yesterday that Telstra has lodged a freedom of information request with the ACCC to hand over complaints from its rivals about access to Telstra's exchanges.

The request was lodged after ACCC chairman Graeme Samuel claimed the watchdog had been deluged by complaints from Telstra's rivals about problems they had accessing Telstra's exchanges so that they could install broadband equipment.

Some had claimed that Telstra had delayed providing access for days or weeks, sometimes arguing it had lost the keys to a particular exchange. The complaints sparked the ACCC to begin asking Telstra's rivals to write to them about their problems.

ACCC chief executive Brian Cassidy confirmed the watchdog had received the FOI request but said no decision had been made on whether to hand over the documents.

"We as a matter of practice are very loath [to hand over such material] and will defend information provided to us in the course of market inquiries," he told the committee.

The ACCC has written to the telco companies which have complained about access to Telstra's exchanges to seek their thoughts on the watchdog revealing their complaints.

A Telstra spokesman said the request was made out of frustration because the telco believed the ACCC had exaggerated complaints it had received. "The reason we lodged the FOI is because we take such complaints seriously, but can't investigate them without facts and the ACCC has been unable or unwilling to provide facts to back such claims," a spokesman said.

"We have entered into almost 1000 agreements for exchange access since 2000. Of those, there's only been seven instances where there have been difficulties."

Competitive Carriers' Coalition executive director David Foreman said many smaller telcos would be reluctant to provide the ACCC with any future information about problems in the industry if their complaints were handed over to Telstra.

"They should not be putting smaller carriers in a situation where they are intimidated," he said.

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