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ACCC SAYS OPTUS TERMINATION UNREASONABLE |
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Written by Adam Gosling
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Wednesday, 09 November 2005 |
The Australian Competition and Consumer Commission has released a draft decision denying Optus the 17 cents per minute termination rate it wanted to charge competitors for calls to Optus mobiles.
The price Optus wanted to charge would have grown to 17 cents per minute in 2007, but the ACCC has rejected this as “substantially above the cost”.
ACCC Chairman, Mr Graeme Samuel argued that high mobile termination rates inhibit fixed line service operators that do not have a mobile network. Most Australian ISPs fall into this bracket. While they (like Optus) are able to lease Telstra phone lines to provide a fixed line service, only Optus and Telstra offer both fixed and mobile product.
"The ACCC has consistently argued pricing mobile termination significantly above cost will have negative impacts in downstream markets. This is particularly so in the market within which fixed-to-mobile services are provided, where high termination prices end up being passed on to consumers in the form of higher prices for fixed-to-mobile calls,” said Samuel.
"The high termination costs also make it difficult for those providers of fixed-line services that do not own and operate mobile networks to compete with those fixed-line service providers – such as Optus – that do.
"The ACCC has a number of concerns with Optus's proposed undertaking", he said. "This included concerns with the theoretical underpinnings of the methodology employed to determine its 17 cpm estimate.
"Even if the ACCC had found this methodology was appropriate, it could not have accepted the undertaking", he said. "In addition to the ACCC's concerns with the underlying methodology, it has further issues with the application of the methodology and empirical concerns with some of the inputs used to generate the 17 cpm estimate".
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