ATUG Conference 2005

1

• ATUG Conference 2005
• David Tudehope
• Chief Executive
• Macquarie Telecom

2
6 Point Action Plan for Competition

• Ring fencing or arms-length dealing rules
  between Telstra Wholesale Telstra Retail
• A de-merger or divestiture power to complement
  existing ACCC powers on mergers acquisitions
• Increase ACCC resources, expertise funding
• TPA reforms - eg. toughen Part XIB
  anti-competitive provisions enable ACCC to
  set terms conditions rather than wait for
  Telstra to submit an undertaking
• The right people in the ABA/ACA Merger ACMA
• Change USO modus operandi

3

• Competition works
• but it could be a lot better

4
Industry could do better if given the chance

• Even with 8yrs of open competition there are
  still roadblocks to investment, which are
  stifling true competition. Far too many
  opportunities for Telstra to frustrate
  competition as a Gatekeeper.
• Our continuing challenge is to foster investment
  to ensure real choice that is widely available
  and keenly priced, particularly in the area of
  broadband services.

5
Price Indexes for PSTN Services for Other
Business Consumers
6
Lets look at the progress the industry has made
to date

• Local calls
• Back in 1992 25c price cap in theory a maximum
  but in reality it was needed to stop price
  gauging
• 1997 22c cap introduced by Government
• March 1997 Macquarie presents case for Local
  Call Declaration' to TAF. Telstra comment not
  in my lifetime
• 1999 Local calls Declared and after
  cost-based arbitrations by ACCC, are now
  available from a range of suppliers
• 2005 Managed competition' leads to 37 plus
  reduction since 1997

7
Lets look at the progress the industry has made
to date

• Fixed-to-mobile
• Back in 1992 Part of line rental thus only
  available from Telstra
• 1997 Telstra argues that it would cause
  confusion for anyone other than Telstra to offer
  F2M to consumers, separately from line rental
• 1998 F2M included in Pre-selection basket but
  F2M competition held hostage by GSM termination
  rate.
• Macquarie is foundation member of CCC to take on
  big 3 mobile players
• 2004 ACCC mandates 45 wholesale rate reduction
  to be phased in over 2 ½ years

8
How can we deliver on these customer needs?

convergence is a disruptive technology convergenc
e will change the pricing paradigm convergence
will present us with new contestable
markets convergence will require us to better
understand our customers
9
Action Plan Summary

• Ring fencing or arms-length dealing rules
  between Telstra Wholesale Telstra Retail
• A de-merger or divestiture power to complement
  existing ACCC powers on mergers acquisitions
• Increase ACCC resources, expertise funding
• TPA reforms - eg. toughen Part XIB
  anti-competitive provisions enable ACCC to
  set terms conditions rather than wait for
  Telstra to submit an undertaking
• The right people in the ABA/ACA Merger ACMA
• Change USO modus operandi