ACCC slashes charge of the telco brigade

Consumer watchdog the ACCC has recommended that Telstra slash the prices it charges competitors for the use of its network by up to 25 per cent.

In a statement issued yesterday, the ACCC (Australian Competition and Consumer Commission) said that by overcharging its competitors by more than 30 per cent of competitively "efficient" prices, Telstra effectively stood to rip Australian telco users off to the tune of $250 million over the next two years.

According to the ACCC, Telstra plans to charge its competitors, which include Cable & Wireless Optus, AAPT, Primus Telecommunications and Vodafone, 2.3 cents per minute for use of the telco's network during the 1999-2000 financial year, dropping to two cents per minute during 2000-2001.

The ACCC argued that this would represent between 30 and 45 per cent of competitors' operational costs - leaving Telstra with an "artificial advantage".

A more reasonable rate of charge would be 1.8 cents per minute for 1999-2000, dropping to 1.5 cents per minute for 2000-2001, the ACCC said.

As a result of the federal commission's inquiry into Telstra's network pricing, which commenced in September last year, the ACCC expects Telstra to lower the prices it charges competitors "in the next month".

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More about AAPTAustralian Competition and Consumer CommissionAustralian Competition and Consumer CommissionCable & WirelessOptusPrimus AustraliaPrimus TelecommunicationsTelstra CorporationVodafone

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