The Australian Communications Authority (ACA) will drastically reduce carrier licence charges from 1 July, following a review of the price schedule showed the previous levies were well above cost recovery prices.
Application charges for a telecommunications carrier license have been reduced from AU$10,000 to AU$2200, and the minimum annual charges have been reduced to less than AU$1,000 from the previous AU$10,000 in accordance with the ACA's new price schedule.
The ACA said it decided to adopt a "cost recovery principle" in regards to its carrier licence application fee after the completion of the 2003 review of "Minimum Charges for Carrier Licences and Licence Applications", dropping the previous charges set by the government in 1997.
The two annual carrier charges were also altered, with the standard charge reduced to under AU$1000 and the second charge set to be transformed in a variable fee to reflect the size of the organisations and its eligible revenue.
Senior executive manager for the ACA telecommunications, Dr Hugh Millroy, said the benefits of the reduction will be most felt by the smaller niche providers rather than the larger carriers.
Acting ACA chairman Dr Bob Horton said the price reduction will provide a more level playing field in telecommunications market.
-Reducing these charges for smaller players provides equity by avoiding an effective subsidy in favour of the major carriers and will encourage new entrants into the market," said Dr Horton.
The Department of Communications, Information Technology and the Arts (DCITA) stated in a release following the announcement yesterday that consumers will be the ones to most benefit from the license fee reductions as it expects the reduction in charges will incite more carriers to enter the market.
The DCITA release said the reductions have removed the monetary obstacles of new players entering adding to carrier competition.
"In a market that offers opportunities for small innovative operators, the carrier licence fee arrangements could potentially be a barrier to entry. These changes to carrier licensing arrangements remove this barrier," stated DCITA.
Remote country regions will particularly benefit from the fee reduction, according to DCITA, as the lower operational charges will lessen the costs for carriers to providing a rurally focussed telecommunications service.
"New carriers are increasingly niche based operators, offering a range of innovative new services, such as fixed wireless broadband services," DCITA said in the release.
The ACA said the charges will be reviewed every two years, with the fixed annual charge recalculated each year.
According to the ACA, carriers paid annual licence charges of more than AU$26.6 million from 2002-2003.
Dr Horton predicted that around 100 carriers will see a reduction in total annual charges in 2004-2005 due to the new pricing schedule.