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Australia: Telstra CEO slams ACCC’s wholesale price cut

 |  October 13, 2015

New Telstra CEO Andrew Penn on Tuesday said he is considering appealing the Australian Competition and Consumer Commission’s decision last week to order a 9.4% cut in the telco’s wholesale access prices.

According to the Sydney Morning Herald, Penn said during his inaugural AGM speech that the move will wipe €51.3 million off Telstra’s EBITDA by mid-2016.

“Investors in infrastructure need…a regulatory framework where their costs are able to be recovered – otherwise investment in important infrastructure is unlikely to be made,” he said, in the report.

The ACCC on Friday ordered a one-off 9.4% reduction in Telstra’s wholesale copper access prices, even though the operator had requested permission to raise them.

Explaining its decision, the watchdog said the upward pressure on pricing – the shrinking customer base caused by the migration of consumers from Telstra’s legacy network to NBN, and fixed-mobile substitution – was more than offset by the downward pressure coming from lower expenditure and the falling cost of capital

“Users of Telstra’s network should not pay the higher costs that result from fewer customers as NBN migration occurs,” said ACCC chairman Rob Sims, in a statement on Friday.

The decision to settle on a 9.4% price cut is slightly less than the 9.6% cut the regulator proposed in June.

Full content: Herald Sun

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