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Government strengthens price controls over telecom services



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MINISTER FOR TRANSPORT AND COMMUNICATIONS1

Kim C Beazley, MP -L, A U S T R A L I A ^ - V '

NIEW ยง M L 1 A S E 4/91 23 January 1991

GOVERNMENT STRENGTHENS PRICE CONTROLS OVER TELECOM SERVICES

All of Telecom’s monopoly services now were subject to government price controls pending the introduction of new price-cap arrangements, the Minister for Transport and Communications, Mr Kim Beazley, announced today.

Telecom now must obtain the Minister's approval for alterations to charges for all its monopoly services not covered by price caps.

This means that services and charges such as ISDN, telex and public mobile telephone services, and rentals for leased lines, have now been brought under price control.

Price-cap arrangements which have been in force for some time only apply to business and residential rentals and trunk and local call charges. This arrangement limits price rises to 4% below the CPI increase over the preceding year.

"A Determination issued today concerning the new price control measures is strictly a temporary one and will be replaced after the merger of Telecom and OTC by a new system of price caps, with separate caps applying to local, trunk and international services," Mr Beazley said.

The price controls announced today were necessary to protect the consumer, the Minister said. They would ensure that Telecom could not make increases in charges unable to be justified through increased costs, during the period leading up to the licensing of the second telecommunications carrier.

"The notification and disallowance procedure under the Determination provides me with the opportunity of referring price rises sought by Telecom to AUSTEL for its assessment and advice," Mr Beazley said.

The Determination issued today was foreshadowed in the Minister's 8 November 1990 statement on comprehensive reforms to be introduced in the telecommunications sector over the next twelve months.

Media contacts:

Minister's Offices Paddy Costanzo (06) 277 7200 Department: Graeme Barrow (06) 274 7856 ____

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