Telstra 'price squeeze' claims go to ACCC

Telstra 'price squeeze' claims go to ACCC

Summary: Competitors have acted on concerns about new Telstra pricing, lodging a complaint with the Australian Competition and Consumer Commission (ACCC) over an alleged "price squeeze" between the incumbent's wholesale and retail margins.

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Competitors have acted on concerns about new Telstra pricing, lodging a complaint with the Australian Competition and Consumer Commission (ACCC) over an alleged "price squeeze" between the incumbent's wholesale and retail margins.

Telcos have argued in the past that it is very difficult to compete with Telstra if it offers a service at a lower price through its retail company BigPond than it offers through its wholesale arm.

Internode and iiNet last week said that they were looking at lodging a complaint.

Today Internode confirmed it had lodged a complaint with the ACCC last Friday, also representing iiNet. Internode carrier relations manager John Lindsay said the ACCC had acknowledged the complaint.

"It's simply not economically viable to sell retail products that are based on a wholesale input from Telstra where that cost is above the prevailing retail price," Lindsay said today.

"BigPond have recently lowered their retail prices on at least three major ADSL2+ plans, without making appropriate changes to the underlying access prices to deliver the same services via Telstra Wholesale," Lindsay said. "This means that their retail cost is now substantially below their wholesale cost on these plans. That, in turn, means that matching those BigPond ADSL2+ prices through the Telstra Wholesale access path would send any provider broke.

"Internode have submitted a complaint to the ACCC which explains the nature and importance of this situation in detail, and which asserts that this conduct can, and should, trigger the issuing of an ACCC 'Competition Notice' under the Trade Practices Act, requiring Telstra to modify its wholesale access pricing in an appropriate manner."

Internode and iiNet's complaint to the ACCC can be read here (PDF).

Topics: Legal, Government, Government AU, Telcos, Telstra

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12 comments
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  • iiNet, and Internode have a large ammount of there own DSLAMS, why dont they offset the telstra wholesale charges with the prices they charge customers using there own hardware?

    As soon as they cant tell there customers 'telstra costs more', or when Telstra starts to get competive with price, every one crys fowl?
    amckern-b0f83
  • "As soon as they cant tell there customers 'telstra costs more', or when Telstra starts to get competive with price, every one crys fowl?"

    No as soon as the monopoly owner of the infrastructure lowers their prices to a point where there is evidence that they are getting a cheaper price from TW which is supposed to be supplying Bigpond at the same prices as the rest of the industry.

    Then they cry fowl as they should. This legislation was introduced during the sale of Telstra to prevent them from monopolizing the market.

    This does not even touch on the fact that Telstra regularly refuse access to exchanges where competitors WANT to install their own equipment and also only allow 1 ISP at a time to install equipment making all others wait in line.

    YOU can cry fowl all you want but these restrictions were placed on Telstra when it was sold NOT after.

    If you were a idiot/not so idiot (hey i own shares, but i also know the game) to buy shares and expect it to be a license to print money at the Australian public's expense well sorry you should have read the prospectus better.
    kirbykia
  • 'As soon as they cant tell there customers 'telstra costs more', or when Telstra starts to get competive with price, every one crys fowl?'

    Probably because the fox has yet again ignored the fences and snuck into the chicken coop.
    (amount, don't, their, can't, competitive, cries, foul.)
    Tailgator
  • Sadly, this computer lacks a copy of firefox :)
    amckern-b0f83
  • This is all an excellent case and point for why the NBN is an absolute must.
    Not only do we need the technology to be competitive in the world marketplace, but we absolutely MUST correct the horrific mistake that was made when all of Telstra was sold without any provision for a competitive market.
    Creating a private monopoly (especially on something as basic as communication) is always a recipe for disaster.
    viditor
  • Destroy Telstra. The greedy, disgracefull, fat, stinking maggots.
    slimey-d2628
  • Slimey im so happy that you have been completely objective, factual and filled with

    considering a lot of the wholsale companys pay Telstra from $2.50 per customer per month and the Whole saler charge from $30 per month i think they are getting pretty good deals

    For years Telstra has been accused of being over priced, and being a cash cow and discraceful for over charging their customers yet when Telstra drops their prices suddenly its the evil monopolising Telstra trying to under cut its competitors even though its prices are still a fair bit higher then its competitors

    Funny Optus/Singtell and AAPT etc arnt complaining its only companys (as their prices are already cheaper then Telstra's new prices) Yet IINET and other smaller companys are complaining because they dont want to drop their own prices to be competitive they want to keep getting the same rediculous profit when their advertising consists of that they are "not Telstra" and when customers see Telstra actually being competitive they cry foul
    Brumby-5254e
  • oh and Telstra Retail/Bigpond and Telsta Wholesale are completely seperate as per the rules set by the ACCC. Telstra Retail and Telstra Wholesale arnt allowed to communicate with each other regarding their prices and any price changes etc

    If Retail and Wholesale had communicated IINET and co and people like slimey would be doing the "telstra stinks" mantra yet when they abide by the rules Telstra gets accused by IINET and CO and people like slimey " the Telstra Stinks" mantra goes out again and if Telstra does nothing you guessed it IINet and co and people like slimey start the mantra again "telstra stinks" mantra

    no matter what Telstra does people like Slimey and IINET are twisting and reading stuff that isnt their finding any excuse to scream "Telstra Stinks" from the rooftops
    Brumby-5254e
  • Does that mean that Telstra have been denied access to exchanges by, ah Telstra and Telstra were part of the case against Telstra, where damages were awarded to accessers like Telstra against, umm, Telstra.

    LOL...

    But I do actually agree. Can't whinge Telstra are too expensive and gouging us and then when thay say, ok, we'll drop our prices whinge again...

    Unless of course, they are predatory pricing and undercutting their wholesalers, which would contravene the access laws, by which they received the PSTN...!
    RS-ef540
  • Australia has the strictest laws in the world on Telstra controlling it. If you want to see what happens without control go to America. Over their yes they have great speeds in the big city's but 100m from the city boundarys you cant even get ADSL just dial up. Their are no access requirement laws hence if you want to sell a service oyu have to build your own stuff in garages etc

    Their are many parts of America where in the name of fairness they split apart their main company but in one town you have access to internet through one carrier and you have no options to connect to another carrier. and that is all over America. I have friends in America who hate their service provider but dont have a choice because the country has been divided up with area's designated to different carriers

    I openly admit im a Telstra employee, also im a long time Telstra customer. Over the years ive tried going with Vodaphone (for 12 months mobile) and Optus for 6 months but ended up going back to Telstra and im not a Telstra shareholder.

    I am paying now $99 per month on one of their new plans created via the price cuts for ADSL 2+ with Bigpond with a 200 gig download limit this limit includes my uploads and downloads and if i go over the limit i get throttled down to 256K. Their are still far better deals out their with almost every carrier, the other carriers dont even need to drop their prices. If the competitors are already cheaper then the prices Telstra has dropped its prices to hence Telstra still being the most expensive how can that be undercutting their competitors

    Is Telstra Perfect? far from it. Do i have issues with Telstra with its customer service? Sure do i think Telstra has heaps of room for improvement? definetly but i think some people are far to quick to jump on the Telstra is the ultimate evil bandwagon
    Brumby-5254e
  • I too am a Telstra customer. I even bought a few TLS shares when they went ex-div a few weeks back (after doing likewise previously and selling once they headed north) following further tanking, to all time lows... thinking well, surely they can't go down too much more...LOL

    But the simple fact is, they received the PSTN (prior to privatisation) with strict access laws. Simple...

    Telstra have made $B's in profit since and all they were asked to do was let others "hire" the PSTN from them, perform upkeep on their multi-billion $ golden goose and throw the bush some scraps via the USO, but even with $B's in profit per year they still whinge?

    Seriously...!
    RS-ef540
  • Well Slimey, there is no doubt about it, your name describes you perfectly.
    Wallingford-314a6