009/06
28 February 2006

Line rental parity for rural Australia enshrined in price controls

Telstra will now be required to offer a basic retail line rental service at the same price across Australia following an amendment to the Telstra price controls, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, said today.

The Government announced the price controls would be amended in December last year. The Telstra Carrier Charges – Price Control Arrangements, Notification and Disallowance Determination No.1 of 2005 (Amendment No. 1 of 2006) was made today.

“The price controls that apply to Telstra are a key telecommunications safeguard. They make sure that the efficiency gains Telstra makes are passed through to its customers in the form of lower prices in markets where competition is not yet fully developed,” Senator Coonan said.

Under the amended price controls Telstra will not be permitted to charge more than 22 cents for local calls offered with this service.

The Determination also makes it clear that the price for the basic line rental service to residential customers will remain frozen at its level on 31 December 2005 of $31.95 until 30 June 2007, and thereafter only increase at the rate of inflation.

In addition, customers who select the basic line rental service from Telstra will be able to select other carriers for their trunk and international calls if they choose.

“These requirements will make sure that all Australians have access to a line rental safety net service without compromising Telstra’s capacity to offer competitive pricing packages in the market,” Senator Coonan said.

The Determination also make changes to the price cap on dial-up internet calls using the 0198 number range to ensure these calls are capped along the same lines as local calls.

Other price control arrangements introduced on 1 January 2006 will remain: untimed local calls will remain capped at 22 cents and Telstra is still required to continue to offer a package of services and support targeted at low income consumers.

“The Determination reaffirms this Government’s commitment to retail pricing parity for the benefit of all Australians, especially those living in regional, rural and remote areas of the country,” Senator Coonan said.

A review of the price controls will be initiated in 2008 for completion in early 2009.