Telstra milks dying business

Just a few days after the ACCC announced its regulation plans for local call cost pricing, Telstra has slashed its wholesale local call charge by 32 per cent, to just over nine cents per minute.

The telco giant has stated that it wants to encourage people to use their home phones and the fixed network more as part of a package of proposed wholesale pricing changes.

Telstra lodged the new price listing with the ACCC, and hopes the regulatory body will view the move as meeting the company's commitment to providing local services to Australians at the same price.

General manager of Telstra’s regulatory affairs, Tony Warren, said the proposed changes to local call charges and originating and terminating access were needed because of the changing way people were now using telephone services.

"The fixed network is the backbone of all telecommunications, and is used for home phones, most broadband, and even as part of mobile communications," he said. "But people are using their mobile phones more, and less dial up internet, so fewer calls are being made to cover our fixed network costs."

Telstra said it also needs to rebalance the network charges providers pay to each other to use their networks so that carriers using Telstra's networks pay a fair contribution towards its fixed network costs.

However telecommunication expert Paul Budde believes Telstra is not only trying to deflect criticism over the real issue of broadband access, but is also ensuring no other service providers muscle in on the dying business of local ficed-line calls.

“The real situation is that [fixed line calls] is a dying market and Telstra is very cleverly milking the last possible revenues of the dying business," he said. "It’s the case of last year’s car model is cheaper than this years.”

He believes Telstra is maximising lowered prices for wholesale and cleverly avoiding other company’s moving into the market and stealing Telstra’s competition.

“We are now seeing AAPT in deep trouble because it was reselling Telstra’s old products," he said. "Optus is also going through financial pain because it was relying on Telstra’s local call pricing.

“They are trying to deflect [the fact] that Telstra’s been a bad boy and have the whole country in an uproar over broadband access -- that’s where the battle is.”