telstra tem substantiation report quarter 1 – 2015/16 · the 2015/16 tem report for quarter 1 (q1...
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TELSTRA CORPORATION LIMITED (ABN 33 051 775 556)
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Telstra TEM Substantiation Report
Quarter 1 – 2015/16
Quarter 1: 1 July 2015 – 30 September 2015
30 November 2015
Public Version
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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Contents
1. Executive Summary 3
2. TEM Report Results 4
2.1. Reportable Wholesale Bundles 4
2.2. Wholesale Customers 6
3. Explanation of Results 7
3.1. TEM and the FLSM 8
3.2. Forecast versus actual data 9
3.3. Geographic differentiation 10
3.4. Other Economic Costs 10
4. Notes 11
4.1. Financial Events 11
4.2. Model Drivers 11
5. Glossary 12
Appendix A – Quarter 1 2015/16 Results 13
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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1. Executive Summary
Telstra’s Structural Separation Undertaking (SSU) includes commitments to ensure equivalence in
pricing across Wholesale Customers and Telstra’s retail business, and improved transparency in relation
to Telstra’s internal costs. As part of this commitment, Telstra regularly publishes reports based on the
Telstra Economic Model (TEM) to make the revenue and cost information that Telstra itself uses to run
the business transparent to the ACCC.
Where a TEM Report shows that the External Wholesale Price (EWP), the price faced by Wholesale
Customers, is not within +/-5% of the effective Internal Wholesale Price (IWP) faced by Telstra for certain
wholesale service bundles, Telstra is required to submit to the ACCC a ‘Substantiation Report’ providing
an explanation for this result.
The TEM Reports and any Substantiation Reports will be available for any future ACCC regulated
pricing reviews.
The 2015/16 TEM Report for Quarter 1 (Q1 FY16) indicates that due to the treatment of unattributable costs and variations in Corporate Administration costs which occur periodically, there is a negative variance between the EWP and IWP for this quarter. However, overall this quarterly variance, as well as the variance measured since this reporting began in FY2013, remain within +/-5%.
The nature of the EWP and IWP variance metrics within the TEM reports means that they are susceptible to quarter-to-quarter movements in costs – particularly indirect and unattributable costs such as depreciation and corporate administration expenses, which will have highly variable impacts on individual quarterly results over the financial year. As such, any quarterly results need to be assessed in the context of results over a longer time period.
There are other considerations that are important when considering the TEM report:
The prices for the Wholesale services included in the TEM are regulated by the ACCC.
The methodology used to determine costs in TEM differs from that used by the ACCC’s models
used in setting prices for fixed line services. For example, the TEM Report uses allocation rules
from Telstra’s accounting systems, while the ACCC’s Fixed Line Services Model (FLSM) used to
set the current regulated prices as part of the Fixed Line Services Final Access Determination
(FAD) 2011 uses allocation rules derived from its TSLRIC model.
The TEM is based on recent historical information, while the ACCC’s pricing model is based on
forecasts made at the time of the pricing decision.
While different wholesale services tend to be purchased in different geographic areas (e.g. ULLS
and LSS are typically sold in lower cost areas and resale services tend to be sold in higher cost
areas), TEM is unable to differentiate costs geographically in the same way.
The IWP calculation does not necessarily account for all economic costs that are appropriately
recovered through prices.
The actual experience of Wholesale Customers is also important here, as these companies typically
purchase a range of services from Telstra Wholesale. For example, Telstra has looked at the likely
average weighted variance between the IWP and EWPs for three of Telstra’s largest Wholesale
Customers, iiNet, Optus and TPG, using publicly available subscriber numbers. This analysis
estimates these companies are treated more favourably than Telstra’s retail business units in relation to
the bundle of services they purchase, and have the benefit of a variance ranging up to 68% across their
voice and broadband services.
Note: while the ACCC released a Final Access Determination for regulated fixed line services in October 2015, the prices are set for the period 1 November 2015 to 30 June 2019, and so no change to the variance between the EWP and IWP will be attributable to the new prices until the next quarterly report.
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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2. TEM Report Results
Telstra provides the TEM Report to the ACCC for each reporting Quarter. This report tables the financial
measures for the Reportable Retail Products and the Reportable Wholesale Products specified by the
SSU, and reports the IWP and EWP for the Reportable Wholesale Products and Reportable Product
Bundles.
The IWP is calculated as the sum of allocated expenses, depreciation and amortisation, and cost of
capital, divided by the total demand for each Reportable Product Bundle and Reportable Wholesale
Product. This is effectively the internal cost for the same network requirements as required by the
Reportable Wholesale Bundle or Reportable Wholesale Product.
The EWP is calculated as the total revenue divided by the total demand for each Reportable Product
Bundle and Reportable Wholesale Product. This external price is in effect the average yield for each
Reportable Wholesale Bundle or Reportable Wholesale Product.
2.1. Reportable Wholesale Bundles
The TEM Report for Q1 FY16 shows that the costs allocated overall to the Total Reportable Wholesale Product Bundle are less than the revenue earned for the quarter. It shows that price per SIO for the bundle of all Reportable Wholesale Services is 1.8% higher than the allocated cost per SIO. The results also show that prices for the bundles of voice and voice plus WDSL are favourable to Telstra’s Retail business unit by 23.1% and 23.3%, respectively, but prices for the bundle of ULLS and LSS are more favourable to Wholesale Customers by 28.3%.
Table 1. TEM Q1 FY16 Results – Reportable Product Bundles
Wholesale Bundle Internal
Wholesale Price
(per qtr)
External
Wholesale Price
(per qtr)
Variance
All Reportable Wholesale Products per SIO $105.96 $107.83 -1.8%
Voice and WDSL Bundle per SIO $130.42 $160.79 -23.3%
Voice Bundle per SIO $77.49 $95.41 -23.1%
ULLS and LSS Bundle per SIO $64.87 $46.48 28.3%
Note: See Appendix A for complete table including all Reportable Wholesale Product Charge Types.
Accounting for quarter-to-quarter volatility in variance results
Since the introduction of TEM Reporting, a great deal of variability has been observed in the quarterly variance between the IWP and the EWP. Assessment of the underlying drivers of changes in IWP and EWP variance from quarter to quarter has shown that a significant and growing proportion of observed change is due to the impact of volatility in unattributable and indirect costs, rather than fundamental change in the directly attributable costs and revenues of the relevant services. Examples of unattributable and indirect costs that are impacting on quarterly results include: financial adjustments (foreign exchange and bond rates); quarterly variation in administration costs (and the treatment of these costs); reviews of asset service lives and consequent variability in depreciation expenses incurred – period-on-period; and movement in the Corporate WACC bi-annually.
The impact of accounting and/or corporate overhead changes on the IWP and EWP variance outcomes also needs to be carefully considered in interpreting the results set out in TEM Reporting.
In order to take account of the quarterly variation associated with the timing of accounting events such as those set out above, it is useful to examine the variance over a longer period.
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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Taking the total variance since the introduction of TEM Reporting (that is, the aggregate variance observed over fifteen TEM reports), it can be seen that the variance for the bundle of all wholesale services is much lower than the single quarter view, as set out in Table 2.
Table 2. TEM Cumulative Results – Reportable Product Bundles Q3 FY12 to Q1 FY16
[Commercial-in-confidence commences] [Commercial-in-confidence ends] The cumulative variance since the introduction of TEM Reporting remains within +/-5% and is currently -1.2%, indicating that over the fifteen TEM reporting periods, Telstra has met its obligations under the SSU to provide equivalent price outcomes for Wholesale Customers and Telstra’s Retail Business Units.
As set out in Chart 1, since the introduction of TEM Reporting, a steady decline can be seen for both the IWP and EWP. Chart 1. Total Reportable Wholesale Product Bundle IWP, EWP and SIO index time series
[Commercial-in-confidence commences] [Commercial-in-confidence ends]
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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2.2. Wholesale Customers
Equivalence should be considered at an aggregate level because Wholesale Customers typically purchase a range of services, taking into consideration their own retail customer base. Telstra Wholesale Customers typically purchase a range of services across the Total Reportable Wholesale Product Bundle.
While the aggregate result for all Wholesale Customers is important, for the purpose of illustrating the position likely to be faced by Wholesale Customers, Telstra has also looked at the likely average weighted variance between the IWP and EWPs for two of Telstra’s largest Wholesale Customers.
Using publicly available information, Telstra has set out the reported subscriber (SIO) numbers and the proportions of On-Net SIOs and Off-Net SIOs (where reported) for two of Telstra’s Wholesale Customers, and estimated the variance between IWP and EWP weighted by On-Net and Off-Net SIO proportions (Table 3). On-Net services are typically provided using the LSS or ULLS products, while Off-Net services are supplied using either WLR (for voice services) or WDSL (for broadband services).
For example, Optus reports a split of approximately 99% On-Net and 1% Off-Net broadband subscribers. While their public reporting does not distinguish whether LSS or ULLS are employed to provide the On-Net services, the variances for port charges for these service are approximately 68% and 20% respectively. The table demonstrates that based on their publicly reported mix of services, both Wholesale Customers are likely to be treated more favourably than Telstra’s retail business units in relation to the bundle of services they purchase.
Table 3. Selected Wholesale Customers’ Estimated IWP/EWP Variance
Reported SIOs ‘000s
Reported On-Net
SIOs
Reported Off-Net
SIOs
Weighted Variance Q1
Optus1 Voice (exc HFC) 490 96% 4% 18%
Broadband (exc HFC) 512 99% 1% 20% to 68%
TPG2 Voice 591 92% 8% 17%
Broadband 777 92% 8% 17% to 62%
Notes: On-Net and Off-Net SIOs are as publicly reported (see footnotes).
Voice Weighted Variance calculated using Q1 variances for ULLS (for On-Net) and WLR (for Off-Net)
Broadband Weighted Variance ranges calculated using Q1 variances for ULLS and LSS (for On-Net) and
WDSL (for Off-Net).
1 SingTel Group Results Q2 FY16, Historical Financial Summaries spreadsheet, "Optus Drivers" tab http://info.singtel.com/about-
us/investor-relations/financial-results
2 TPG Full Year Results Presentation, 22 Sep 2015, page 10 "Consumer: Broadband Subscribers" & page 12 "Consumer: Home
Phone Subscribers" https://www.tpg.com.au/about/pdfs/FY15_Annual%20Presentation.pdf (does not include iiNet data post merger)
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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3. Explanation of Results
In the SSU, Telstra commits to include an explanation for any differences of more than 5% between the IWPs and EWPs for Reportable Product Bundles. As indicated above, for Q1 FY16, the voice bundle and the voice and ADSL bundle have a Variance between the IWP and EWP of more than 5%, while the bundle of all Reportable Wholesale Products has a Variance below 5%.
The remainder of this report explains the reasons for differences between the IWPs and EWPs in more detail.
As the EWPs tend to be similar to the regulated prices for services included in the Reportable Product Bundles, the difference between IWPs and EWPs can be explained by the difference between IWPs and regulated prices. The former is calculated from TEM and the latter is calculated from the ACCC’s FLSM used to set the current regulated prices as part of the Fixed Line Services FAD 2011 and the Wholesale ADSL FAD 2013. TEM and the ACCC’s FLSM are quite different models - some of the major differences between these models are explained in section 3.1 of this report.
As discussed in section 3.2, the TEM uses historical financial information for operating and capital expenditure and demand relating to the relevant financial period, while the ACCC’s FLSM was based on forecast information.
A further explanation for differences between the IWPs and EWPs for ULLS and WDSL services is that the EWPs are largely based on geographically deaveraged prices, while the IWPs are based on geographically averaged costs. The effect this has on the difference between the IWPs and EWPs is discussed in section 3.3.
Finally, the regulated prices for services are set having regard to legislative criteria that are broader than what is measured by TEM reporting. In the setting of prices for some Regulated Services, those legislative criteria would be promoted by considering economic costs that are not counted in TEM. This is explained in section 3.4 of this report.
Table 4 sets out the applicable explanations for each of the individual services and Reportable Product Bundles.
Table 4. Summary of explanations for IWP/EWP Variances
Differences
between TEM
and the FLSM
Difference
between FLSM
forecasts and
TEM actuals
Geographic
differentiation
Other Economic
Costs
ULLS X X X X
LSS X X
WADSL X X X X
WLR X X X
Local Cal ls X X X
PSTN OTA X X XBU
ND
LE O
F FI
XED
WH
OLE
SALE
SER
VIC
ES
VO
ICE
AN
D
WD
SL
BU
ND
LE
VO
ICE
BU
ND
LE
Explanation affecting IWP/EWP variance (if any)
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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3.1. TEM and the FLSM
The individual services underlying the Reportable Product Bundles are regulated by the ACCC and
subject to FADs. As such, the EWPs tend to be similar to the regulated prices set for those services,
although revenue allocations, product definitions, and commercially negotiated deviations from regulated
rates are causes for some differences. This is illustrated in Table 5 for Q1 FY16.
Table 5. Average Monthly EWPs and Regulated Prices Q1 FY16
The difference between the IWPs and the regulated rates (and EWPs), for all reportable wholesale
services, can be explained by the fact that IWPs are determined by the TEM whereas regulated rates
(and EWPs) were determined by the ACCC’s FLSM used during the Fixed Line Services FAD 2011 and
the Wholesale ADSL FAD 2013.
TEM is not a regulatory cost model, it is the set of management accounts used by Telstra to measure
costs and revenues associated with specific services and to inform internal decision making. The FLSM
and TEM are fundamentally different models. Some of the major differences which have contributed to
the Variances in the reports include:
methods of cost allocation;
methods of unitisation;
timing of inputs; and
differences in inputs and definitions (including the WACC).
The methodologies of cost allocation in TEM differ from those used in the ACCC’s FLSM at the time the
current FAD prices were set (in 2011 for WLR, LCS, OTA, ULL and LSS and in 2013 for WDSL). The
TEM allocation factors are based on activity accounting methodologies, guided by the allocation
principles set out in the SSU. They are also updated regularly to reflect the latest activity information.
The FLSM’s allocators were based on the ACCC’s previous TSLRIC model (the Analysys model) and
IWP EWP Regulated
Price
TOTAL BUNDLE OF FIXED WHOLESALE SERVICES Per SIO 35.32 35.94
VOICE AND ADSL BUNDLE Per SIO 43.47 53.60
Wholesale ADSL In-Place Connection per connection 72.00 55.82 22.50 to 80
New Connection per connection - - -
AGVC per Mbps 33.15 32.15 32.31
Port Zone 1 per SIO 15.77 22.31 24.44
Port Zone 2 per SIO 19.89 28.15 29.66
VOICE BUNDLE Per SIO 25.83 31.80
Wholesale Line Rental (WLR) In-Place Connection per connection 37.50 47.95 n/a
New Connection per connection 182.53 233.43 n/a
Rental per SIO 15.53 22.14 22.84
Local Calls Usage per call 0.065 0.088 0.089
PSTN OTA Usage per end min 0.0126 0.0098 0.0095
Unbundled Local Loop Service (ULLS) Connection per connection 73.84 75.80 Variable
Port per SIO 22.56 16.23 16.21 to 48.19
Line Sharing Service (LSS) Connection per connection 91.91 48.38 Variable
Port per SIO 9.19 1.80 1.80
MTAS Usage per end min 0.036 0.036 0.036
Wholesale Services
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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were guided by the fixed principles in the ACCC’s FADs. They were set for the three-year regulatory
period and so reflect forecasts made at the beginning of that regulatory period. There are also specific
differences in allocation methodologies. The TEM would allocate costs to a service, when they are
specific to that service, while the ACCC adopted a principle of pooling some costs and spreading them
over a group of services (specifically, for ULLS, LSS and WDSL). Further, the TEM allocates network
costs to all services that use the network, while for some network costs (for example, CAN costs) the
ACCC only allocated costs to a specific group of services.
With respect to unitisation, the TEM Report divides annual costs by actual demand for the Quarter. For
some services (ULLS, WLR, and OTA) the ACCC’s FLSM divided the annual revenue requirement
(cost) by historical demand, where the historical demand is higher than current demand.
To illustrate this, Table 6 compares the prices produced for the Fixed Line Services FAD with the prices
which would be produced by the FLSM if the demand referenced was updated to appropriate actual and
forecast usage.
Table 6. Difference between average FLSM prices for 2011/12-2013/14 using historical and updated demand
[Commercial-in-confidence commences]
[Commercial-in-confidence ends]
Additionally, as mentioned above, the time period used in the TEM Report is significantly different from
that used in the FLSM used during 2011 and 2013 FAD processes. The TEM Report refers to the
immediate past quarter of actual financial results and uses demand for that quarter, while the FLSM
used to set prices for the current regulatory period reflected forecasts for both costs and demand made
at the beginning of the regulatory period for the financial years 2011/12, 2012/13 and 2013/14. These
timing differences mean that outputs from TEM, which represent a point-in-time, should not be expected
to match the outputs of the FLSM which reflects the average prices from a long-term forecast.
The TEM Report also uses different inputs to the FLSM used to set regulated prices during 2011 and
2013 FAD processes including asset lives, value of some assets, depreciation rates, and the WACC,
amongst other items. It also has different definitions for services that can affect any comparison. For
example, the FLSM defined OTA and LCS to include the sum of all retail and wholesale minutes, while
TEM treats retail and wholesale minutes separately.
As a further example, if we replace the WACC used in the FLSM with the post-tax equivalent of the pre-
tax WACC used in the TEM Report, the resulting external wholesale prices for the fixed line services
would be [Commercial-in-confidence commences] [Commercial-in-confidence ends] higher. Note also
that the WACC used in the FLSM was held constant for the Regulatory period, whereas the WACC used
in the TEM Report is reviewed regularly and updated where appropriate.
Table 7. Difference between average FLSM prices for 2011/12-2013/14 using ACCC WACC and TEM WACC
[Commercial-in-confidence commences]
[Commercial-in-confidence ends]
3.2. Forecast versus actual data
As mentioned in Section 3.1, the TEM uses financial information from Telstra’s accounting systems,
including historical operating and capital expenses, and demand that relates to the relevant financial
period. In contrast, the ACCC’s FLSM used during the Fixed Line Services FAD 2011 and the
Wholesale ADSL FAD 2013 was a forward-looking model that used forecasts for operating and capital
expenses and demand (except for some assets as discussed above) over the regulatory period. Table 8
illustrates the difference between the operating expense and demand forecasts used in the FLSM and
actual operating expenses and demand reported in the TEM Quarterly reports.
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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Table 8. Differences between Operating Expense and Demand forecasts and actual
[Commercial-in-confidence commences]
[Commercial-in-confidence ends]
3.3. Geographic differentiation
While different wholesale services tend to be purchased at different prices in different geographic areas
(e.g. ULLS is typically purchased in lower cost areas and WDSL services tend to be purchased in higher
cost areas), TEM is unable to differentiate costs geographically in the same way, as Telstra’s financial
systems do not capture this information.
For example, the WDSL EWP depends on geographically de-averaged prices, while the WDSL IWP is
calculated using geographically averaged costs. The revenue per WDSL Zone is identifiable but the
WDSL expenses and capital are not, as Telstra’s financial systems are unable to determine the same
geographic split. The IWP for WDSL by Zone was calculated by allocating costs as per the proportional
revenue for each Zone.
At the same time, the take-up of WDSL services in regional areas (Zone 2 and Zone 3) is
disproportionate compared to the take-up of all ADSL services. As at September 2015, [Commercial-in-
confidence commences] [Commercial-in-confidence ends] of WDSL services were acquired within Zone
2/3, compared to [Commercial-in-confidence commences] [Commercial-in-confidence ends] for all retail
and wholesale ADSL services. As a result, the WDSL EWP, which reflects this bias in service take-up to
higher-priced regional areas, will naturally be higher than the IWP, which is mostly calculated on the
basis of costs averaged over all geographic areas.
ULLS exhibits similar issues, with the relative take-up of ULLS being highly skewed to ULLS Bands 1, 2
and 3, relative to the distribution of all access lines. As a result, care must be taken in comparing the
IWPs and EWPs for these services in isolation.
Table 9 illustrates the bias of take-up of ULLS and WDSL services and the impact on the average price
per SIO.
Table 9. ULLS and WDSL geographic distribution
[Commercial-in-confidence commences]
[Commercial-in-confidence ends]
3.4. Other Economic Costs
The regulated prices for services were set having regard to legislative criteria that are broader than what
is measured by TEM reporting. It is often the case that those legislative criteria would be promoted by
considering economic costs that are not necessarily counted in TEM, which measures accounting costs.
For example, the legislative criteria require a different approach to valuing land assets, to that applied in
TEM. Land assets are valued accounting for the cost of inflation, which promotes the legislative criteria,
while the TEM values land at historic cost. Land assets in the FLSM used during the Fixed Line
Services FAD 2011 and the Wholesale ADSL FAD 2013 were relevant to the pricing of WDSL, ULLS,
WLR, local calls and OTA.
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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4. Notes
From time to time there will be events which impact the costs and revenue included in the TEM Report,
and flow through to the IWPs and EWPs for the Reportable Wholesale Products and Reportable Product
Bundles.
4.1. Financial Events
A certain amount of volatility is expected in Corporate Administration and Support costs over the course
of a financial year. This can be attributed to periodic reviews of company-wide overhead costs which will
potentially impact any given TEM Report. Treatment of these costs has been consistent from a product
profitability perspective however their variable nature and subsequent influence upon results should be
considered.
As noted earlier in this report, the nature of the EWP and IWP variance metrics within the TEM reports means that they are susceptible to changes in unattributable costs such as corporate administration expenses, which will have highly variable impacts on individual quarterly results over the financial year.
Table 10 illustrates the variability of the total costs included in the Corporate Administration category
over the last four Quarters.
Table 10. TEM Report Corporate Administration Costs Q2 FY15, Q3 FY15, Q4 FY15 and Q1 FY16
[Commercial-in-confidence commences]
[Commercial-in-confidence ends]
4.2. Model Drivers
Telstra performs periodic reviews and updates of the inputs used in the TEM. These reviews may result
in differences between the results reported for each Quarter.
This Quarter coincided with a review and update of the asset allocators used by TEM. TEM uses the
allocators to allocate network asset capital values and asset related costs, and are updated on a six-
monthly basis. The timing of this update of drivers means that the impact will be seen at Q1 and Q3.
Among other things, TEM allocates costs on the basis of service demand. Due to different growth
trajectories for wholesale and retail services, Reportable Wholesale Products have received an
increased allocation of network costs due to wholesale services increasing in network share relative to
retail services.
Table 11 illustrates the variability of the total costs included in the Network category over the last four
Quarters.
Table 11. TEM Report Total Network Costs Q2 FY15, Q3 FY15, Q4 FY15 and Q1 FY16
[Commercial-in-confidence commences] [Commercial-in-confidence ends]
Telstra TEM Substantiation Report Quarter 1 – 2015/16
TELSTRA Public | Substantiation Report – Q1 FY16
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5. Glossary
Term Definition
ACCC The Australian Competition and Consumer Commission
ADSL Asymmetric Digital Subscriber Line
AGVC Aggregated Virtual Circuit service
CAN Copper Access Network
EWP External Wholesale Price
FAD Final Access Determination
FLSM Fixed Line Services Model
IWP Internal Wholesale Price
LCS Local Carriage Service
LSS Line Sharing Service
PSTN Public Switched Telephone Network
PSTN OTA PSTN Originating and Terminating Access service
Reportable Product or Bundle Those products specified in the SSU which must be included in the TEM
Report
SIO Service in Operation
SSU Structural Separation Undertaking
TEM Telstra Economic Model
TSLRIC Total Service Long Run Incremental Cost
TW Telstra Wholesale business unit
ULLS Unbundled (unconditioned) Local Loop Service
WACC Weighted Average Cost of Capital
WDSL Wholesale ADSL service – covers both ADSL and ADSL2+ services
WLR Wholesale Line Rental service
TELSTRA Public | Substantiation Report – Q1 FY16
PAGE 13/13
Appendix A – Quarter 1 2015/16 Results
Internal
Wholesale
Price
External
Wholesale
Price
% Variation
(Costs Telstra retail
business units
faces for the same
components
purchased by
w holesale
customers)
(Average revenue
from supply to
w holesale
customers)
Wholesale Line Rental (WLR) In-Place Connection per connection 37.50 47.95 -27.89%
New Connection per connection 182.53 233.43 -27.89%
Rental per SIO 46.60 66.42 -42.53%
Local Calls Usage per call 0.07 0.09 -34.36%
PSTN OTA Usage per end min 0.013 0.010 22.12%
VOICE BUNDLE Per SIO 77.49 95.41 -23.12%
Wholesale ADSL In-Place Connection per connection 72.00 55.82 22.47%
New Connection per connection - - -
AGVC per Mbps 99.45 96.44 3.03%
Port Zone 1 per SIO 47.30 66.94 -41.52%
Port Zone 2 per SIO 59.67 84.44 -41.52%
VOICE AND ADSL BUNDLE Per SIO 130.42 160.79 -23.29%
Unbundled Local Loop Service (ULLS) Connection per connection 73.84 75.80 -2.66%
Port per SIO 67.67 48.69 28.05%
Line Sharing Service (LSS) Connection per connection 91.91 48.38 47.37%
Port per SIO 27.57 5.39 80.47%
TOTAL BUNDLE OF FIXED WHOLESALE SERVICES Per SIO 105.96 107.83 -1.76%
MTAS Usage per end min 0.036 0.036 0.00%
Wholesale Services