ACCC issues draft MTAS pricing principles determination and indicative prices for 2009–2011
The Australian Competition and Consumer Commission today issued draft pricing principles and indicative prices for the mobile terminating access service (MTAS) from 1 January 2009 to 31 December 2011.
The draft pricing principles continue to adopt a cost–based pricing approach informed by the total service long run incremental cost (TSLRIC+) framework, but have added considerations of international cost benchmarking, developments in other markets and data captured under the Regulatory Accounting Framework (RAF).
"The ACCC remains concerned that the significant reductions in the price of the MTAS since 2004 have not been adequately passed on to consumers making fixed-to-mobile calls, in particular residential consumers," ACCC Chairman, Mr Graeme Samuel, said today.
The draft indicative price for the MTAS to apply from 1 January 2009 to 31 December 2011 will remain at 9 cents per minute.
"The draft indicative price reflects the uncertainties surrounding the actual cost of supplying the MTAS, the significant investments in infrastructure made by mobile network operators (MNOs) and concerns about the absence of substantial reductions in fixed-to-mobile retail," Mr Samuel said.
The ACCC is of the view that maintaining the MTAS price at 9 cpm for three years would provide a higher level of certainty to MNOs and is in long term interest of end-users.
Interested parties are invited to make written submissions on the draft determination and indicative prices by 5 p.m. on Friday 12 December 2008.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, Mr Ed Willett, Commissioner, Mr Michael Cosgrave, Group General Manager, Communications Group, or Mr Robert Wright, General Manager, Compliance and Regulatory Operations, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520. For general inquiries, please call the Infocentre: 1300 302 502.
To receive information on issues of interest to you, please go to www.accc.gov.au, click Media Centre, News releases and enter your email address under Notify me. The ACCC provides an automatic email alert system whenever there are changes to a page or pages to which you have subscribed.
The MTAS is a wholesale input, used by providers of calls from fixed–line and mobile networks, in order to complete calls to mobile subscribers connected to other networks.
Under current commercial arrangements between network owners, the network owner that originates a call to a mobile network will, generally, purchase the MTAS from the network owner that completes (terminates) the call. The originating network owner will recover these costs, and the costs it incurs from originating the call, through the retail price it charges its directly connected end-user for providing the call. This commercial arrangement is typically referred to as the calling party pays model.
The legislative framework
The ACCC is required by section 152AQA of the Trade Practices Act 1974 to determine pricing principles for a declared service. The pricing principles may contain price-related terms and conditions and the ACCC may, when determining price-related terms and conditions, specify indicative prices. The ACCC is also required to publish a draft determination, invite submissions on the draft and consider any submissions received, before it makes a final Pricing Principles Determination.
