The telephone universal service obligation (USO) requires that Telstra provides all Australians with ‘reasonable access’ to standard telephone services and payphones on an ‘equitable basis’. Telstra has had some form of statutory USO for several decades.
In 2012, the USO was incorporated into a 20 year contract (the Telstra USO Performance Agreement, or TUSOPA) between Telstra and the Commonwealth. The customer service obligations of the TUSOPA essentially reflect those of the Commonwealth statutory USO regime. However, the TUSOPA contains additional detail on how Telstra is to provide the services. Under the TUSOPA, Telstra receives a fixed and unindexed annual GST inclusive payment of $253 million to deliver standard telephone services and $44 million to deliver payphones.
The objective of the audit was to assess the effectiveness of the Department of Communications and the Arts’ (the Department’s) contract management of selected telephone universal service obligations (the TUSOPA), specifically standard telephone and payphone services.
To form a conclusion against the audit objective the ANAO adopted the following high level audit criteria:
• Does the contract support achievement of the stated policy objectives and provide value for money?
• Has the Department effectively managed the contract for telephone universal service obligations?
• Do the performance reporting and monitoring arrangements provide transparent information on how contract services are achieving stated policy objectives?