Australia's government has unveiled new price controls for Telstra Corp Ltd for the three-and-a-half years from January 1, 2006, aiming to cut call prices for residential and small business customers.
Communications Minister Helen Coonan said price controls would be removed from services to large businesses and government agencies that negotiated individual Telstra contracts because competition had driven down prices in these areas.
Call price reductions would be focused towards residential and small businesses consumers.
"Under the new controls there will be an overall price freeze on a basket of Telstra's line rentals, local calls, international and fixed to mobile calls and STD," Coonan said in a statement.
Telstra would also be required to offer the same local call prices to metropolitan and regional areas. A 22 cent cap on untimed local calls would be retained and extended to dial-up internet calls using the 0198 number range, but the local call cap on payphones would be increased from 40c to 50c - the first payphone price rise in 10 years.
A review of the new price controls would be completed in early 2009. The government unveiled plans on Wednesday to fully privatise Telstra by selling its A$30 billion-plus ($23 billion-plus) 51.8 percent stake in the company late next year.
Under the current price controls, which expire on December 31, 2005, Telstra is required to seek approval from the Australian Competition and Consumer Commission (ACCC) for price increases only when it proposes to raise line rental charges.