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Telstra, Australia‘s dominant telecommunications company, on Wednesday underlined its determination to force rivals to pay higher access charges by warning it could launch a constitutional challenge against the country’s antitrust regulator.
Telstra has been entangled in a long-standing battle with the regulator, the Australian Competition and Consumer Commission, over what it could charge rivals to access its network.
Late last year, the ACCC ruled in favour of Telstra’s competitors, demanding that Telstra cut its access charges, thereby reducing its earnings. Last August, Telstra also blamed a separate dispute with the ACCC for its decision to shelve its flagship A$3.5bn broadband infrastructure project.
However, the context of the regulatory tussle has changed following the successful divestment in November of the government’s remaining 51 per cent stake in Telstra, thereby ending state control over the former monopoly phone operator. Telstra shares have outperformed the market since, climbing back to their highest level since September 2005.
The share price gained a further 0.9 per cent to A$4.39 on Wednesday amid speculation that the company could soon divest its phone switching stations, which number 6,700 are often located on sought-after land. A spokesman said: ”Telstra is constantly reviewing its asset portfolio. Telstra has already divested a large number of property over the last decade.”
Will Irving, Telstra’s general counsel, said in an interview with the Australian Financial Review that the company was considering a constitutional challenge before the country’s High Court, which would focus on specific provisions in the Australian Trade Practices Act that have forced Telstra to obtain ACCC approval for the prices it charges rivals.
Telstra has long argued that it faces excessively strict regulatory oversight compared with other industry leaders. However, the company spokesman said a decision would only be taken “in coming weeks’’ about whether to go to the High Court.
He added: “Telstra’s strategy is not about seeking compensation from the Commonwealth but force the Commonwealth to recognise that there needs to be a policy so that those who access Telstra’s network pay commercial prices to do so. Currently competitors are being given access at below-cost prices, which means Telstra cannot invest going forward. This is a bankrupt policy.’’
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