Telstra broadband pricing called into question by rival

The broadband pricing of communications giant Telstra has been called into question by a rival broadband company Internode, which accuses it of anti-competitive broadband pricing.

Internode, the Australian broadband company based in Adelaide, has recently called for an investigation into what it claims is anti-competitive pricing from its rival broadband provider Telstra. The company is said to have complained to the Australian Competition and Consumer Commission over the unfairness of pricing with regards to Telstra.

A letter was sent from Internode to the ACCC chairman Graham Samuel, with accusations that its rival provider Telstra was being anti-competitive with prices, and was in breach of contract based on the Trades Practice Act 1974. Internode also wants a competition notice to be issued to Telstra under Part XIB of the Act.

The Internode letter read: “Telstra is taking advantage of its substantial degree of power in the market for wholesale broadband services with the likely effect of substantially lessening competition in that market and also in the market for retail broadband services. This anti-competitive conduct will have most effect in the large number of exchange service areas (ESAs) without competitive infrastructure.”

The company also said: “Telstra has recently lowered its retail prices on at least three major BigPond ADSL2+ plans, without making appropriate changes to the underlying access prices to deliver the same services via Telstra Wholesale. This means that BigPond’s retail cost is now substantially below the wholesale cost of these plans. In turn, that means matching those BigPond ADSL2+ prices through the Telstra Wholesale access path would send any provider broke. ”

Source – Dynamic Business