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Minister disallows telecom price increases

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‘minister for transport and communications

Telecom's proposals to increase charges for some of its services were not in the public interest, the Minister for Transport and Communications, Kim Beazley, said today.

He ruled out the increases because they clearly exceeded the expected movement in this year's Consumer Price Index.

The decision was based on advice received from AUSTEL — the telecommunications industry regulator.

'Payphone charges will remain at 30 cents a call — 10 cents less than Telecom's proposal', Mr Beazley said.

'Although the last increase in payphone charges was in August 1986 when the price rose by 50 per cent, from 20 cents to 30 cents, another 10 cent increase at this time is excessive'.

Telecom's payphone mechanisms take a 10 cent coin minimum, which limits its scope for increasing charges.

Other increases were initially disallowed by the Minister. These included Telecom's proposals for 008 services, Datel, Voice Grade Leased Lines, Megalink charges and some operator-assisted services.

As a result Telecom resubmitted proposals for smaller increases for.these services and these revised price changes have been accepted.

Telecom also submitted price proposals to AUSTEL to increase rental and call charges for local and trunk " services, under Government price cap arrangements.

' AUSTEL has concluded that the proposals meet with the CPI minus four per cent price cap, and Telecom can now increase those charges', Mr Beazley said.

Kim C Beazley, MP


28 May 1991


C O iV iM O N W E A lT , 1 \ . ,./2 PARLIAM ENTARY LiBRAivY 1 MIC A H


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'Although the proposed increase in the local call rate is two cents, the average price of telephone calls and rentals has fallen in real terms since the introduction of price controls in July 1989.

'New price control arrangements will come into effect from 1 July next year and will be even tougher than current arrangements', the Minister said.

’Average prices for a wide range of services will be subject to an overall cap of 5.5 per cent below the inflation rate. The current price cap formula allows increases of up to four per cent below the rate of inflation over the period of the c a p '.

Media contact:

Gary O'Neill (Minister's Office) (06) 277 7200 Michael Pocock (Department) (06) 274 7187