Wholesale data rates are regulated and set in consultation with the National Information and Communications Technology Authority (Nicta), according to a DataCo official.
He told The National that DataCo had been reducing its charges through this, and that further price drops were expected on the back of infrastructural projects underway.
However, those price drops were constrained from being passed onto the consumer because of the absence of regulatory powers by Nicta and other agencies to directly set the price for data in the retail sector, he said.
He said about 20 service providers and the two mobile operators were being sold wholesale internet data by DataCo. That number would increase as prices dropped.
“The data price set are based on a cost-recovery model to make up for the costs that the government has to spend, especially for the Coral Sea cable which is about 10 per cent of the total cost,” he said.
“This costs money and we have to factor that into the prices initially in a fair way with approval from Nicta.
“As it is, the internet rates are not regulated in the retail sector, with ISPs and mobile companies setting rates based on the costs of doing business at their discretion.
“There is a need for both regulatory and structural adjustments to be made to give Nicta and other agencies the capacity to come in on this. Our operations should influence charges in this area as well and we expect that to happen eventually as this is a process that is still underway.
“The more our prices drop the more it will lead to a greater number of operators being able to come into the retail sector, meaning more competition and that will benefit the consumers.”