TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) PAGE 1/13

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Telstra TEM Substantiation Report

Quarter 3 – 2014/15

Quarter 3: 1 January 2015 – 31 March 2015

30 May 2015

Public Version

Telstra TEM Substantiation Report Quarter 3 – 2014/15

TELSTRA | Substantiation Report – Q3 FY15

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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 3 2014/15 Results 13

Telstra TEM Substantiation Report Quarter 3 – 2014/15

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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 2014/15 TEM Report for Quarter 3 (Q3 FY15) indicates that due to the treatment of unattributable costs, variation in cost allocations and reductions in the Weighted Average Cost of Capital (WACC) used in the TEM Reporting, there is a negative variance between the EWP and IWP for this quarter. However, overall the variance measured since this reporting began in FY2013 remains 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.

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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 Q3 FY15 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 6.95% 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 37.5% and 35.2%, respectively, but prices for the bundle of ULLS and LSS are more favourable to Wholesale Customers by 26.5%.

Table 1. TEM Q3 FY15 Results – Reportable Product Bundles

Wholesale Bundle Internal

Wholesale Price

(per qtr)

External

Wholesale Price

(per qtr)

Variance

All Reportable Wholesale Products per SIO $99.34 $106.24 -6.95%

Voice and WDSL Bundle per SIO $116.51 $157.54 -35.2%

Voice Bundle per SIO $69.69 $95.79 -37.5%

ULLS and LSS Bundle per SIO $62.07 $45.64 26.5%

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 3 – 2014/15

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Taking the total variance since the introduction of TEM Reporting (that is, the aggregate variance observed over thirteen 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

[Commercial-in-confidence commences] [Commercial-in-confidence ends] The cumulative variance since the introduction of TEM Reporting remains within +/-5% and is currently -0.4%, indicating that over the thirteen 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. [Commercial-in-confidence commences] [Commercial-in-confidence ends] Chart 1. Total Reportable Wholesale Product Bundle IWP, EWP and SIO index time series

[Commercial-in-confidence commences] [Commercial-in-confidence ends]

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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 three 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 three 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, iiNet reports a split of approximately 70% On-Net and 30% 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 67% and 8% respectively. The table demonstrates that based on their publicly reported mix of services, all three 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 Q3

iiNet1 Voice 472 NA

Broadband 890 70% 30% 5% to 38%

Optus2 Voice (exc HFC) 501 96% 4% 18%

Broadband (exc HFC) 531 99% 1% 19% to 68%

TPG3 Voice 535 96% 4% 18%

Broadband 786 89% 11% 14% to 58%

Notes: On-Net and Off-Net SIOs are as publicly reported (see footnotes).

Voice Weighted Variance calculated using Q4 variances for ULLS (for On-Net) and WLR (for Off-Net)

Broadband Weighted Variance ranges calculated using Q4 variances for ULLS and LSS (for On-Net) and

WDSL (for Off-Net).

1 iiNet H1 FY15 Results Presentation, pp 4-5 http://investor.iinet.net.au/IRM/Company/ShowPage.aspx/PDFs/1864-10000000/InvestorPresentationH1FY15ResultsiiNetLimited

2 SingTel Group Results Full Year FY15, Historical Financial Summaries spreadsheet, "Optus Drivers" tab

http://info.singtel.com/about-us/investor-relations/financial-results

3 TPG Full Year Results Presentation, 24 Mar 2015, page 12 "Consumer: Broadband Subscribers" & page 14 "Consumer: Home

Phone Subscribers" http://www.tpg.com.au/about/pdfs/Presentation_2015.pdf

Telstra TEM Substantiation Report Quarter 3 – 2014/15

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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 Q3 FY15, the voice bundle, the voice and ADSL bundle and the bundle of all Reportable Wholesale Products have a Variance between the IWP and EWP of more than 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 3 – 2014/15

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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 Q3 FY15.

Table 5. Average Monthly EWPs and Regulated Prices (Q3 FY15)

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 33.11 35.41

VOICE AND ADSL BUNDLE Per SIO 38.84 52.51

Wholesale ADSL In-Place Connection per connection 58.59 51.79 22.50 to 80

New Connection per connection - - -

AGVC per Mbps 30.48 34.04 32.31

Port Zone 1 per SIO 15.30 21.89 24.44

Port Zone 2 per SIO 19.60 28.05 29.66

VOICE BUNDLE Per SIO 23.23 31.93

Wholesale Line Rental (WLR) In-Place Connection per connection 17.43 50.21 n/a

New Connection per connection 75.10 216.29 n/a

Rental per SIO 14.40 22.15 22.84

Local Calls Usage per call 0.065 0.089 0.089

PSTN OTA Usage per end min 0.0117 0.0101 0.0095

Unbundled Local Loop Service (ULLS) Connection per connection 109.02 73.05 Variable

Port per SIO 21.16 16.16 16.21 to 48.19

Line Sharing Service (LSS) Connection per connection 88.58 50.84 Variable

Port per SIO 8.99 1.81 1.80

MTAS Usage per end min 0.036 0.036 0.036

Wholesale Services

Telstra TEM Substantiation Report Quarter 3 – 2014/15

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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.

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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 March 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.

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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.

This Quarter has demonstrated the impact of two financial events on the IWPs.

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 Q4 FY14, Q1 FY15, Q2 FY15 and Q3 FY15

[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 (e.g. Maintenance, Depreciation and Cost of Capital) due to

wholesale services increasing in network share relative to retail services.

The TEM Report uses the endorsed Telstra pre-tax WACC to calculate the cost of capital. The

corporate WACC is reviewed by Telstra’s Senior Economist on a six-monthly basis and was updated in

the previous TEM Report.

Table 11. TEM Report Cost of Capital Q4 FY14, Q1 FY15, Q2 FY15 and Q3 FY15

[Commercial-in-confidence commences] [Commercial-in-confidence ends]

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5. Glossary

Term Definition

ACCC The Australian Competition and Consumer Commission

ADSL Asynchronous 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

IAD Interim Access Determination

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 Local Loop Service

WACC Weighted Average Cost of Capital

WDSL Wholesale ADSL service – covers both ADSL and ADSL2+ services

WLR Wholesale Line Rental service

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Appendix A – Quarter 3 2014/15 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 17.43 50.21 -188.00%

New Connection per connection 75.10 216.29 -188.00%

Rental per SIO 43.20 66.46 -53.85%

Local Calls Usage per call 0.07 0.09 -35.83%

PSTN OTA Usage per end min 0.012 0.010 14.29%

VOICE BUNDLE Per SIO 69.69 95.79 -37.45%

Wholesale ADSL In-Place Connection per connection 58.59 51.79 11.59%

New Connection per connection - - -

AGVC per Mbps 91.44 102.11 -11.67%

Port Zone 1 per SIO 45.90 65.66 -43.07%

Port Zone 2 per SIO 58.81 84.14 -43.07%

VOICE AND ADSL BUNDLE Per SIO 116.51 157.54 -35.22%

Unbundled Local Loop Service (ULLS) Connection per connection 109.02 73.05 32.99%

Port per SIO 63.48 48.48 23.63%

Line Sharing Service (LSS) Connection per connection 88.58 50.84 42.61%

Port per SIO 26.97 5.42 79.90%

TOTAL BUNDLE OF FIXED WHOLESALE SERVICES Per SIO 99.34 106.24 -6.95%

MTAS Usage per end min 0.036 0.036 0.00%

Wholesale Services