Vodafone mobile terminating access service undertaking discussion paper

A discussion paper on a second access undertaking lodged by Vodafone in relation to the mobile terminating access service (MTAS) was issued today by the Australian Competition and Consumer Commission.

The undertaking specifies some of the price and non-price terms and conditions on which it proposes to supply the MTAS on its second generation (2G) and 2.5G mobile networks.

The undertaking, lodged on 23 March 2005, replaces a previous undertaking lodged by Vodafone in relation to the MTAS on 26 November 2004.

Vodafone withdrew its previous undertaking on 12 April 2005 following the discovery of errors in the cost model which supported its previous undertaking.

"Consistent with the requirements of the Trade Practices Act, the ACCC intends to assess the replacement undertaking using an open public process", an ACCC Commissioner, Mr Ed Willett, said today.

"All available information will be taken into account, including the undertaking itself, submissions provided by Vodafone in support of its undertaking, and other submissions from interested parties".

Copies of the replacement undertaking, together with the discussion paper, are available from the ACCC's website, ww.accc.gov.au. The ACCC invites submissions on any aspect of the undertaking. Also on the ACCC's website are public versions of submissions from Vodafone in support of the undertaking.

The ACCC is also currently arbitrating nine access disputes in relation to the MTAS under the dispute resolution procedures in Division 8, Part XIC of the Act. In this regard, the ACCC notes that Telstra has recently withdrawn its notification of an access dispute with Vodafone in relation to the MTAS. Given that the legislation contemplates that arbitrations be conducted in private, the ACCC will not be making any further public comment in relation to the disputes at this stage.

Background

Under s. 152 BS of the Trade Practices Act 1974, a carrier or carriage service provider may provide the ACCC with a written access undertaking under which the carrier or carriage service provider undertakes to comply with the terms and conditions specified in the undertaking in relation to the standard access obligations applicable to that provider.

The MTAS was deemed to be declared under the Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997.

In July 2001, following a series of arbitrations, the ACCC developed a retail benchmarking pricing principle to guide mobile operators in establishing the price of the MTAS.

On 30 June 2004, the ACCC allowed the existing declaration of the MTAS to expire, and replaced it with a new declaration under s. 152 AL of the Act. The new declaration included termination of voice calls on 2.5G and 3G mobile networks. On the same date, the ACCC issued a new pricing principle providing that the price of the MTAS should follow an adjustment path such that there is a closer association of the price and underlying cost of the service. In this regard, the ACCC estimated that the cost of providing this service, including a normal profit, lay within a range of five to 12 cents per minute.