Draft mobile terminating access service pricing principles determination and supporting documentation issued
The Australian Competition and Consumer Commission has issued the Draft MTAS Pricing Principles Determination relevant for 1 July 2007 to 31 December 2008. The current MTAS Pricing Principles Determination will expire on 30 June 2007.
The Trade Practices Act 1974 requires the Commission to have regard to a pricing principles determination if the Commission is required to arbitrate a MTAS access dispute.
The Draft MTAS Pricing Principles Determination proposes an indicative price for the MTAS of 9 cents per minute from 1 July 2007 to 31 December 2008.
The indicative prices have been informed by among other things, the WIK Model.
To date the benefits for consumers and business derived from lower MTAS prices have manifest in lower retail prices for mobile services and especially lower FTM rates, which the ACCC considers is an important step in enhancing competition in this market. The ACCC notes that while the reductions in FTM retail rates to date have been positive there is still opportunity for integrated operators such as Telstra and Optus to reduce retail FTM prices further particularly for residential end-users in line with reductions in MTAS.
The Draft MTAS Pricing Principles Determination, the accompanying Discussion Paper and other supporting material will be available on the ACCC's website. Details on how interested parties can also obtain the WIK Model will also be on the ACCC website.
The ACCC is now seeking submissions from interested parties on issues as set out in the Discussion Paper by no later than AEST 9 a.m. Monday 6 August 2007.
*The Domestic Mobile Terminating Access Service is a wholesale input, used by providers of fixed-to-mobile and mobile-to-mobile calls, to allow their customers to call mobile subscribers. It allows consumers (either fixed-line or mobile) to call mobile users. If a call made by the carrier's customer terminates on another mobile network, then the carrier pays the other network owner for the mobile termination access service.
The current public consultation process on the Draft MTAS Pricing Principles Determination has been part of an extensive consultation process which began with the Mobile Services Review in 2003.
That consultation process informed the MTAS Pricing Principles Determination for the period 1 July 2004 to 30 June 2007, which expires on 30 June 2007.
To support future pricing principles determination for MTAS, in March 2006 the ACCC issued a request for tender seeking the services of a consultant to construct a bottom-up cost model with specific economic and engineering parameters for mobile termination access services in Australia.
WIK Consult was engaged in June 2006 and has worked with the ACCC to develop a bottom-up cost model that estimates the efficient cost of supply of the MTAS in Australia using a TSLRIC conceptual framework.
The ACCC commenced a public consultation process on the WIK Mobile Networkand Cost Model on 1 February 2007 which concluded on 16 March 2007. Submissions received during the public consultation process have informed the indicative prices outlined in the Draft MTAS Pricing Principles Determination.
