Telstra today advised the market of a preliminary ruling by the competition watchdog that a single third party broadband provider can pay less for access to its equipment than the industrywide price listed by the telco in its earnings forecasts.
According to Telstra, after close of business on Friday the Australian Competition and Consumer Commission (ACCC) formally notified it that the provider would only have to pay AU$17.70 per month to access copper lines running from suburban exchanges. The advice has potentially serious ramifications for Telstra's finances as the carrier based its recent earnings forecast on an industrywide wholesale price of AU$22 per month.
"Telstra's guidance provided on 10 August was clearly stated as being based on the then current price of AU$22," the company said in its statement.
The price ruling affects access to the copper lines that run directly into customers' premises from one of Telstra's suburban (Band 2) exchanges. For band 1 (inner metropolitan), the ACCC set a price of AU$7.20 and for band 3 (rural) a price of AU$34.20.
Telstra claims that at present the preliminary price ruling only applies to one particular -- but unnamed -- provider but concedes that it will be up to the ACCC to determine if and when the price will be set across the board.
"Once there is sufficient certainty on all necessary elements, Telstra will assess the impact on its business and review its market guidance, and make and related announcements at the appropriate time," the statement concluded.
Meanwhile, the federal government has announced that the Australian Communications and Media Authority will conduct independent national audits of the coverage of Telstra's new 3G 850 network relative to its CDMA network.
"The government welcomes Telstra's commitment to ensuring that mobile phone coverage on the new network will be the same or better than coverage offered on the current CDMA network. These independent audits will be a tangible way of confirming this," the Minister for Communications, Senator Helen Coonan said.
"The audits will assess voice coverage of more than 80 sites across different states and topographies. The field testing will include city and regional centres, but will mainly focus on the less well served rural, regional and remote areas".
Excellent news.The sooner this mob of gangsters go broke the better.Telstra Company Board members that sanctioned the stealing from workers super accounts deserve more than going broke and believe me it's coming.Todays $3-67 share price will look like a good price in a few months.