Australians could be paying less for their phone and internet from next month after Telstra was ordered to cut the price it charges other telcos to access its copper wire network.
The consumer watchdog has ruled Telstra should reduce the price by 9.4 per cent from November 1 as fewer and fewer people rely on the copper wire due to its gradual replacement by the national broadband network.
The Australian Competition and Consumer Commission explicitly dismissed Telstra's argument that the migration to the NBN meant it had to charge the remaining customers more to maintain the same level of service on its fixed line network.
"Users of Telstra's network should not pay the higher costs that result from fewer customers as NBN migration occurs," ACCC chairman Rod Sims said.
"If there is no adjustment for these higher costs, then customers who have not yet been migrated to the NBN will ultimately pay significantly higher prices."
Telstra said it may appeal the decision, which it says contravenes the ACCC's own fixed pricing principles that give Telstra an opportunity to recover the costs of providing services to wholesale customers.
"Any regulated entity should be concerned by this decision," a Telstra spokesman said.
"Investors in infrastructure need a regulatory framework in which fixed principles are followed, as regulatory certainty is important to allow for efficient investment decisions to be made in these important markets."
The ruling will heap further pressure on Telstra, which is already facing increased competition, IG market analyst Angus Nicholson said.
TPG Telecom last month announced it is extending its NBN-rival dark fibre network to carry Vodafone's mobile data, as part of a $1 billion deal between the companies.
"Telstra's revenues and growth will stay up but it's got some very tough competition with TPG's latest deal with Vodafone. The sector as a whole is very competitive," Mr Nicholson said.
"It will be losing even more money off its fixed line products, which have already been a big money loser."
The ACCC ruling is a slight modification on the watchdog's interim ruling in June for a 9.6 per cent price cut, but still represents a significant reduction.
Mr Sims said prices should be falling due to lower expenditures, falling cost of capital and the migration to the NBN.
"These more than offset upward pressures from a shrinking fixed line market," he said.
The 9.4 per cent price cut will be in force until June 2019.
The ACCC's final decision also covers connection and disconnection charges.
