In a blow to the telecommunications giant, the Australian Competition and Consumer Commission (ACCC) has rejected its interconnect charges - saying that it needs to halve its prices.
Today's statement is a repeat of earlier demands from the ACCC for Telstra to drastically cut its interconnect costs. Interconnect costs are the costs that Telstra charges other telecommunications carriers to access its network in order to provide long-distance and international calls.
The ACCC believes that Telstra is currently charging more than the actual cost to other telecommunications carriers according to ACCC's Chair, Alan Fels.
"Telstra's proposed charges were double costs when they were submitted and the excess of charges over costs is even greater now. Telstra's undertaking, submitted in 1997, provides for an average interconnection charge of 4.73 cents per minute. The ACCC considers that this charge should be around 2 cents per minute in 1998-99."
If Telstra cuts its interconnect rates to those demanded by the communications watchdog, it is expected that this may cut the costs of long-distance calls by up to 15%.
