The group who have formed the Competitive Carriers Coalition (CCC) have produced a report which claims that consumers would pay 15 per cent more or about $897 million a year for broadband services if the big telco wins the rights to build and manage a national fibre to the node network.
The report was "bogus" and "a sham", declared Kate McKenzie, Telstra's Wholesale group MD. Other Telstra executives have said that the report is also riddled with mistakes and has only been produced to draw attention away from the weaknesses of the Coalition bid.
The $897 million claim was published by the Competitive Carriers Coalition (CCC), quoting a report it commissioned from the Centre for International Economics (CIE). It said the increased cost is due to Telstra's targeted return of 18 percent on its capital investment.
According to the report's authors, the rate of return Telstra has publicly said it would demand is relatively high and "may be consistent with the abuse of market or monopoly power".
The CIE report says its $897 million forecast is based on Telstra's initial estimate that the network would cost about $9 billion to build. If Telstra maintained its plan to seek protection on broadband prices for 14 years, it would extract $12.6 billion from Australian consumers, the report estimated.
