The Australian Competition and Consumer Commission today issued two reports under the enhanced accounting separation regime for Telstra:
- an imputation and non-price terms and conditions report for the September 2008 quarter, and
- a current cost accounting report for 2007-08.
The reports note, amongst other things, that in the September 2008 quarter:
- imputed margins reported for local services and the bundle of fixed line voice services decreased; while margins for ADSL services increased, and
- wholesale service levels generally improved during the quarter, with all service levels close to or better than those reported retail services.
Copies of the reports will be available on the ACCC's website.
The enhanced accounting separation regime was introduced to address competition concerns arising from the level of vertical integration between Telstra's wholesale and retail services, and also to improve the provision of price and cost information to the ACCC, competing telecommunications service providers, and the public.
On 19 June 2003, the then Minister for Communications, Information, Technology and the Arts directed the ACCC to issue record-keeping rules to Telstra, requiring Telstra to report on:
- current costs in addition to historical costs under the Telecommunications Industry Regulatory Accounting Framework (CCA reports)
- imputation analysis comparing Telstra's retail prices and the costs faced by access seekers in purchasing certain core telecommunications services from Telstra (imputation reports)
- key performance indicators on non-price terms and conditions that compare Telstra's customer service performance between specified retail and wholesale supplied services (NPTC reports).
The imputation and non-price terms and conditions report tests whether there is systematic discrimination in the price or non-price terms offered to Telstra's retail and wholesale customers, and so provides general guidance on the potential for competing service providers to supply consumers. It is not intended to detect all forms of potentially anti-competitive conduct.
The Minister's direction requires that the ACCC make the reports publicly available and comment on the reports submitted. In accordance with the direction, the ACCC first issued record-keeping rules to Telstra in June 2003. In September 2004, the ACCC issued a new record keeping rule (RKR) which specifies the requirements on Telstra to fully implement the current cost accounting framework.
The current cost accounting report provides financial statements for the 'core' telecommunications access services* that have been prepared on a current cost accounting basis and on a historical cost accounting basis.** It is important to note that the cost data presented in these financial statements are not calculated using a fully or substantially optimised network configuration, and do not represent the efficient forward-looking cost of supplying the core services.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel or Mr Ed Willett, Commissioner please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520.
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