Telstra CEO Andrew Penn has criticised the Australian Competition and Consumer Commission’s (ACCC) ruling that operators who access the Telstra copper network will be rewarded with a 9.4 per cent drop in access prices as the decision does not follow the ACCC's fixed pricing principles.
The drop applies from November 1 and covers seven fixed line access services including unconditional local loop service (ULLS), line sharing service (LSS), wholesale line retail (WLR), local carriage service (LCS), fixed originating access service (FOAS), fixed terminating access service (FTAS) and wholesale ADSL.
The decrease in access prices will last until 30 June 2019. ACCC chairman Rod Sims said that operators who use the Telstra network should not have to pay the higher costs that result from fewer customers as the NBN migration occurs.
At a Telstra AGM, Penn said it was “extremely disappointed” in the decision and will be considering its options for appeal.
According to Penn, the decision does not follow the ACCC’s fixed pricing principles.
“These [principles] require your company to be able to recover from wholesale customers, the costs of the services we provide to them. Investors in infrastructure need a regulatory framework in which fixed pricing principles are followed, a regulatory framework where their costs are able to be recovered. Otherwise investment in important infrastructure is unlikely to be made.”
He added that the ACCC departed from its draft decision in March where it was initially considering a uniform 0.7 per cent price drop in fixed line access services.
“That decision correctly recognised the important of providing price stability to the industry at this time of transition to the NBN.”
Telstra’s estimated reduction in revenue and EBITDA in the financial year 2016 due to the ACCC’s final access determination decision for fixed line services is expected to be $80 million, said Penn.