The Australian Competition and Consumer Commission today issued the fifth current cost accounting separation report relating to Telstra.
The report is intended to provide greater transparency of Telstra's operations to ensure that it does not unfairly discriminate between access seekers using its network services and its own retail operations.
The report contains current cost financial information for 'core' telecommunications access services. It constitutes the information that the ACCC is required to make public in respect to current cost accounting under the Ministerial Direction on accounting separation issued by the Minister for Communications, Information Technology and the Arts in June 2003.
The report provides present day valuations of Telstra's assets that are compared with the historical or original cost of these assets. The report also includes profit and loss and capital employed statements prepared on a current cost basis.
The report indicates that on a current costs basis, the aggregate values of assets for the core access services are substantially higher than the historical asset valuations. It is important to note that the information does not represent the forward looking cost of assets nor is it calculated using a fully or substantially optimised network configuration*.
"The pending operational separation arrangements for Telstra may have implications for the necessity to report Telstra's financial data in this way, or the form that any future reporting may take", an ACCC Commissioner, Mr Ed Willett, said today.
"The ACCC, therefore, has recently agreed to a Telstra request to a six-month deferral to a complete implementation of current cost asset valuations. This will ensure that Telstra will not be required to incur possibly unnecessary costs (which, according to Telstra, amount to between $5 m and $10 m) in order to complete the remaining current cost valuations".
Copies of the report will be available on the ACCC's website.
*In determining access prices for a number of services, the ACCC has used a costing methodology based on total service long-run incremental cost (TSLRIC) which is a forward looking, optimised economic costing approach.