Terria bites back at Telstra’s monopolist accusations

Consortium insists its NBN bid is all about competition, in contrast to the monopoly Telstra holds over the nation's telco infrastructure.

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According to Optus, poor market structure and weak regulation by the ACCC has resulted in Australians being slugged the highest broadband prices in the OECD for services significantly behind international benchmarks in terms of speed, cost and transmission technologies.

“We’ve got monopoly assets or infrastructure in Australia today, and the reason we don’t have the broadband coverage that the rest of the world has is because we’re not allowed or able to access those monopoly assets on equivalent terms,” Simmons said.

“If you look at Telstra’s recent financial results you can see in the charts they publish that they are making exorbitant profits on traditional fixed line services. They publish their own charts saying ‘look we’re making more than the rest of the world and PSTN is actually increasing here, not decreasing’, while the rest of the world is going in the opposite direction.”

A recent report by the Centre for International Economics predicted that Australian consumers would pay 15 percent more for broadband services if Telstra wins the contract to build and operate the NBN.

“Sol Trujillo did a presentation at a Merrill Lynch conference in New York [Tuesday] where he was questioned and had to defend why Telstra was making such high EBITDA margins. The rest of the world is saying ‘how come you are making such high EBITDA margins? Is that a future problem for Telstra from an investor’s perspective?’ Because it can’t go on forever, eventually competition has got to emerge because no one else in the world is making those margins.”

In response to Telstra’s accusations of Terria’s anti-competitive intentions, Simmons insists Terria’s bid is “100 percent” committed to open access competition.

He questioned Telstra’s commitment to competition as it is seeking a reduced role in regulating NBN access for the ACCC – which even by its own admission has been inadequate in maintaining effective telecommunications competition until now - and the ability to experiment and set prices based on value rather than cost.

“We have a real, viable and substantial bid, and the bottom line is it is competitive…Our position is independence of the network owner from access seekers, that way you get multiple access seekers competing and you have regulation of the ACCC to ensure the pricing for that monopoly asset doesn’t reflect its monopoly position. Our whole argument is about competition," Simmons said.

“There is something irrational and illogical about Quilty’s comments. I think it’s an indication that they feel threatened by our bid.”