Telstra's USO phone services fall 22 percent

By on
Telstra's USO phone services fall 22 percent

No reason to adjust payments, government says.

Telstra has seen the number of fixed-line phone services it provides under the universal service obligation fall by 22 percent since 2012.

The number was revealed by the government at the end of last week as part of a stoush over the amount of money Telstra receives under its 20-year USO deal.

Though the USO funding has been a contentious topic for many years, the issue was thrust back into the spotlight when Vodafone claimed “government figures show that Telstra has already shut down around half of the copper and payphone services it is supposed to maintain” under the scheme.

Vodafone said it was “concerned” that USO payments to Telstra were “excessive relative to the service that Telstra has been contracted to perform”.

“Telstra appears to be generating a profit at the expense of taxpayers and USO levy payers” including Vodafone, it said, arguing that some of the money should be redistributed into mobile network expansion.

Telstra has already branded the claim that it services 50 percent less services under the USO an “untruth”.

“This is simply incorrect, and no substantiation has ever been provided in support of the statement,” Telstra said earlier this month.

The government, through the Department of Communications, has also decided to weigh in on the issue.

It partially confirmed Vodafone’s point that Telstra continues to receive the full $297 million a year under the USO, regardless of the number of services it has responsibility for.

“There has been a decline in the number of USO services,” the government said.

“We estimate the reductions since the [revised USO] commenced on 1 July 2012 to be a 22 percent fall in Telstra’s fixed line retail standard telephone services and a 9 percent fall in payphones.

“The basis for Vodafone’s claim that services provided ... have halved is not clear.”

Vodafone is continuing to back its 50 percent reduction claim, which relies on figures sourced from a 2011 consultancy report to the ACCC, as well as quarterly numbers submitted to the ACCC under record keeping rules.

It has, however, said that “there is insufficient information publicly available to precisely correlate” the numbers it has used, though it says “there is likely to be a substantial correlation".

In a statement to iTnews earlier this month, Vodafone’s chief strategy officer Dan Lloyd reiterated that the ACCC figures “appears to be the best information publicly available".

“If Telstra disagrees, we encourage them to publish data about exactly how, where and when it spends the USO funding,” Lloyd said.

“We find it very curious that Telstra is so secretive about this. If they’ve got nothing to hide, surely it would be in Telstra’s best interests to open its books.”

For its part, the government appeared largely unconcerned about the USO funding not being aligned to the number of services being provided.

“It is worth noting that the payment ... is declining in real terms each year,” the department said.

In any event, “the funding pays for the delivery of a national solution for voice and payphone services”, the department noted.

“The payment is not calculated on a per premises or per payphones basis.”

The days of the current USO arrangement may be numbered, with the government late last year declaring its intention to replace the USO with a new universal service guarantee (USG) that would kick in sometime after the NBN rollout is complete in 2020.

Telstra has suggested it is open to reform of the arrangement, though it would not settle for any deal that would see it financially worse off, given the current USO deal runs through to the end of 2032.

Got a news tip for our journalists? Share it with us anonymously here.
Copyright © . All rights reserved.

Most Read Articles

Log In

Username / Email:
  |  Forgot your password?