GOVERNMENT OUT OF STEP WITH COST REALITY – JUNE 1999
Over the last few months we have relentlessly argued for further drops in telephone charges.
We have been most vocal on the mobile call charges (now amongst the highest in the western world). However, we have recently also touched upon the local call charge. Competition is driving prices down around the world much faster than in Australia. The tardy policies from the government are constantly lagging roughly a year behind international benchmarks. Since our last report on prices just a few other examples:
- a 3-minute international call between London and New York now costs less than a local call in Australia;
- BT has introduced a free Internet service in the UK;
- China dropped international charges by 50%;
What this means for Australia is that hanging on to outdated price-cap arrangements will again make us less competitive in Australia than in other parts of the world. By sticking to the price-caps Telstra only has to reduce prices by 5%. The rest of the world is clearly moving beyond measures of this sort.
The fact that Telstra reacted happily to the government’s announcement should be a clear indication that we are on the wrong track here.
Let’s hope the Minister delivers on his ATUG 99 promises and ensures that the introduction of competition in the local loop will not be stalled by Telstra. Only in this way will we see real price drops occurring in the Australian marketplace.
The effect of the government’s new policy will actually see price increases in line rentals. This is totally out of step with the significant price drops that are currently happening elsewhere in the telecommunications world.
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