Australian competition regulator ACCC has instructed Telstra to reduce the prices it charges rival operators for access to its extensive copper network by 9.4%.
The mandated reduction is less steep than the 9.6% decrease the ACCC had been considering during an interim decision in June, but remains a significant cut.
In making the decision, the ACCC said it had taken into consideration a number of factors, including the lower capital expenditures required for Telstra as its copper network is gradually replaced by Australia's National Broadband Network (NBN).
Other downward price pressures included the falling cost of capital, the effects of migrations to the NBN and updated information on the NBN rollout.
“Importantly, users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs,” ACCC chairman Rod Sims commented.
“If there is no adjustment for these higher costs then customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices for copper based services.”
Telstra was a former state-owned fixed line monopoly, and upon privatization inherited an extensive copper network. The uneven playing field this created led to legal requirements for Telstra to offer wholesale access to its infrastructure at regulated rates.
But Australian fixed line users are being progressively migrated to the NBN. Telstra is decommissioning its copper network as this occurs, and transferring its last mile connections to nbn, the state-owned company overseeing the NBN rollout.